$717m from tax
3 July, 2017, 12:00 am
MAJORITY of Government’s revenue is derived from direct and indirect taxes and it expects its total direct tax collections to rise to $717.9 million for the 2017/2018 financial year.
According to the 2017/2018 National Budget Supplement for the FY 2015-2016, total direct tax collections amounted to $699.0m, while collections with the direct tax receipts forecast to increase further to $790.4m in the FY 2017-2018.
The budget supplement stated that the increase reflected strong business performance in the coming financial year as well as anticipated improvements in labour market conditions.
Meanwhile, the Government’s indirect taxes include VAT, Customs duties, service turnover tax, water resource tax, departure tax, stamp duties, and other levies.
Total collections for indirect taxes amounted to $1,677.4m in the FY 2015-2016 with collections for the FY2016-2017 are anticipated to rise to about $1,914.3m before increasing further to $2,244.4m in the FY 2017-2018.
According to the budget supplement VAT is a major component of indirect taxes and is the largest revenue earner for Government.
VAT contributed about 25.1 per cent to total revenues in the FY2015-2016 with collections amounting to $715.9m. The estimated collection for the FY 2016-2017 is about $815.1m and the forecast for the FY 2017-2018 is $944.4m.
The Government believes the positive outlook for VAT stems from an anticipated surge in consumption and imports over the next 12 months. Meanwhile, Customs duties comprise fiscal duty, local excise duty, import excise duty, export duty and a levy on luxury vehicles.
Revenue receipts from Customs duties in the FY 2015-2016 totalled to $577.4m, while expected collections for FY2016-2017 are projected at $625.7m.
Customs revenue for the FY 2017-2018 is forecast to rise to $743.5m with the higher forecast taking into account anticipated growth in imports arising from the current pick-up in economic activity, as well as the application of 15 per cent excise duty on alcohol and cigarettes in the 2017-2018 National Budget.