… cites higher income and trade taxes
Despite an economy in which the traditional productive sectors have struggled, the 2019 Mid-year report shows that tax collection has risen and will continue to rise for the rest of the year. This is according to People’s Progressive Party/Civic (PPP/C) Presidential Candidate Irfaan Ali.
According to Ali, in a statement on Sunday, the Government squeezed more tax revenue out of the population in the first half of 2019 – $108.9 billion, than it did in the first half of 2018 ($100.6 billion).
“The increase was attributed to higher income taxes, value added taxes and trade taxes,” Ali said. “The increased taxes financed the growth in current expenditure which ballooned from $92,848 million by the end of June 2018 to $97,325 million at the end of June 2019.”
Ali also alluded to projections, noting that the report estimates the collection of $91.8 million in income tax, $95.8 billion in VAT and excise tax, $25.1 billion in trade taxes and $10.6 billion in the category of ‘others’, by this year end.
“This represents an increase of $3.8 billion,” Ali said. “The half-year report also revealed that the Government intends to extract more from the Private Sector in the form of non-tax revenue. The budgeted amount of $8.4 million from this source was increased to $8.8 million.”
A breakdown of tax collection documented in the report shows that Value Added Tax (VAT) collection increased by $2.1 billion to $24.8 billion between January and June of this year. The report notes that VAT from domestic goods rose by $2 billion owing to higher payments from manufacturing, distribution, services, and oil and gas.
According to the report, the net property tax paid by the Private Sector was $3.6 billion, with some individual payments reaching $700 million. Current tax payments from companies increased by $24.7 million, while arrears payments for companies and individuals were $127.8 million and $101.7 million respectively.
Meanwhile, personal income tax revenue grew by $2 billion, or 16.4 per cent, compared to the corresponding period last year. According to the report, companies in the oil and gas sector accounted for 61 per cent or $1.2 billion.
“The other entities contributing to the increased collections were mining companies, public institutions and telecommunications companies. The number of employers making payments rose by 6.3 per cent or 120 employers during the first half of 2019, in comparison to the same period in 2018. Arrears payments were $0.2 billion for PAYE and $0.6 billion for individual income taxes,” the report says.
Ali also called out the Government for its less-than-truthful analysis of the Balance of Payments (BOP) figures. He noted that the Government has made a concerted effort to downplay what is, in reality, a disaster.
The economist also pointed out that the overall balance before grants widened from $2.6 billion at the end of June 2018 to reach $5.9 billion by the end of June 2019.
“These funds will be utilised to finance other goods and services that is projected to increase to $60,791.1 million, from a budgeted sum of $59,843 million for this category of government expenditure. The emoluments were maintained at $70,151.1 million.”
“In the first half of 2019, the overall balance of payments registered a deficit of US$86.9 million – 37.9 per cent smaller than the previous half-year’s deficit of US$139.8 million. This was supported by a higher surplus on the capital account, despite a higher current account deficit,” the Presidential Candidate said.