Government has increased the tax burden on Guyanese by $60B per year since coming into power in 2015 based on the figures compared in the 2014 and 2018 mid-year reports.
This is according to Opposition Leader, Dr Bharrat Jagdeo on Thursday during a press conference.
“In 2014, our total tax revenue was $135B. The revised figure for Jordan for 2018 is $195B. In just over three years, they’ve increased the tax burden on Guyanese people by $60B more per year…This is a Government that argued that people were paying too much taxes when they were in the Opposition so it’s unconscionable and they’ve done this by raising taxes on rich people as well as the poor people” he said while noting that this is a “massive increase from the PPP days.”
Moreover, Jagdeo asserted that “then they [Government] lamenting why people don’t spend so much money …They didn’t clean out the drug money , what they cleaned out, or took out was money from our pockets. That’s why things are so slow.”
While 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 totaled $109.2 billion, at end-June 2018, 12.4 per cent above the corresponding period, in 2017, due primarily to increased collections from 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, reflecting higher 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.