Opposition calls for more exemptions as Govt bumps up revenues by $13.7B

first_imgMid-Year Report 2018While the performance in the traditional sectors of the local economy has not been favourable, the coalition Government has managed to rake in millions more in revenue from the collection of taxes.According to the Finance Ministry’s Mid-Year Report 2018, the fiscal outturn in the first half of the year was as a result of both improved revenue performance and expanded public expenditure outlays.Revenue collections were driven mainly from taxes, both current and arrears, while public expenditure expansion resulted from additional costs associated with the restructuring of the sugar industry.“Revenue collections totalled $109.2 billion, at end-June 2018, 12.4 per cent above the corresponding period, in 2017, due primarily to increased collectionsOpposition MP Irfaan Alifrom all the major tax categories,” the report stated.Income taxes increased by $5.3 billion, while Value Added Tax (VAT) increased by $3.4 billon; Excise Tax increased by $3.0 billion; and trade taxes increased by $2.0 billion.Over the same period last year, VAT from imports of goods and services grew by $2.0 billion, while VAT on domestic goods grew by $1.3 billion, primarily from higher payments in the telecommunication and wholesale and retail trade sectors.Tax revenue collections remained significant, during the first half, representing 92.2 per cent of total revenue collected, of which arrears accounted for $6.3 billion.However, non-tax revenue collections decreased by $2.8 billion reflecting a reduction in special transfers from statutory bodies, as programmed for the year.Revenue from excise taxes rose by $3.0 billion, to $19.8 billion, during the current review period. Collections from imported petroleum products accounted for $2.4 billion and motor vehicles imports, $527.0 million. Excise tax collections from domestic supply increased by $60.5 million to $2.2 billion.And total non-tax revenue, decreased by $2.8 billion to $8.5 billion during the first half of 2018. This performance reflects less transfers from statutory agencies. Royalties collected by Central Government rose by $717 million, as a result of higher gold production from the two large-scale gold mining companies.Meanwhile, within the tax category, internal revenue collection increased by $6.7 billion, reaching $48.3 billion, during the first half of 2018. This increase was primarily attributed to higher payments of private corporation tax, withholding tax and personal income taxes.“Private corporation taxes increased by $870 million, or 5.0 per cent, reflectingFinance Minister Winston Jordanhigher payments of advance taxes from commercial banks and companies within the services sector as well as increased collection of arrears, due to increased surveillance work,” the report stated.Withholding tax grew by $1.9 billion, or 46.5 per cent, reflecting payments from companies within the oil and gas, services and mining sectors, which grew by $0.9 billion, $0.8 billion and $0.2 billion, respectively, during the period January to June, 2018. Arrears accounted for $677 million, during the review period.Further, net property tax of the Private Sector was $3.1 billion, of which individuals payments were $797.7 million, an increase of $195.1 million above payments received for the same period, in 2017. Arrears were $266.2 million, higher than the $128.1 million collected in January to June 2017.While this may be positive for Government, the Opposition People’s Progressive Party (PPP) has long argued that Government’s tax-oriented approach to growth and policies is among the key factors responsible for the deteriorating economy, with increases for every category of taxes on income, property, production and consumption, and international trade, including environmental taxes.Opposition Member of Parliament Irfaan Ali through a motion had called for the restoration of the purchasing power of the people by removing the imposition of the VAT on zero-rated items, new fees and licences, and an increase in taxes which were included in the 2016 and 2017 budgets.The 3000-word long document extensively lists a number of measures that the parliamentary Opposition believes should be implemented to “stimulate the economy and reduce poverty and hardships.”The PPP made recommendations for improvements to the tax framework, the finance sector, the business sector, infrastructural development, energy sector, education social services, health, agricultural sector, Amerindian welfare, the sugar industry, the rice sector, among others.Ali had argued that the implementation of the recommended policies is critical to the creation of an environment more conducive to the growth and expansion of the economy, the creation of jobs, sending the right signals to the Private Sector, and, improving the welfare of the people.last_img

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