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VAT collection increases to $34.4B
…Govt. spending on Capital Projects hit sharp decline in 2013 – Finance Minister
Guyana’s total earnings last year, discounting the monies earned from Norway under the Guyana REDD+ Investment Fund (GRIF), amounted to $135.7B.
This is according to Finance Minister, Dr. Ashni Singh, who on Thursday last presented the 2014 Budget and said that last year’s earning was 4.8 percent over the previous year.
According to Dr. Singh, the collections reflect “strong performance across several tax categories.”
It was also announced that Value Added Tax (VAT) collections totalled $34.4B, representing another annual increase since it was imposed as a revenue-neutral tax. It has consistently risen over the years.
Finance Minister (standing) delivers his Budget 2014 presentation
In his report to the National Assembly, Dr. Singh told the House that tax revenue collections, which accounted for 93.3 percent of total current revenue collections, minus that of the GRIF inflows, amounted to $126.5B, a 6.9 per cent increase over 2012. Internal revenue collections amounted to $51.7B, an increase of 6.3 percent over collections of the same year.
This, he said, is attributed to continued growth of the private sector as evidenced by corporation tax collections increasing by 16.5 per cent to $21.6B, and reflects increases in several sectors within that category including financial, telecommunications and manufacturing.
Dr. Singh reported too that net property tax collections from private sector companies increased by $507.1M or 29 per cent as a result of significant arrears collected.
Personal income tax collections under the Pay As You Earn (PAYE) system was reduced by $955.8M or 5.9 percent and income tax on the self-employed declined by $67.4M. This was as a result of the reduction in the personal income tax rate from 33S! to 30 percent with effect from January 2013.
Customs and trade tax collections were $13.2B, primarily attributed to increased collections of import duties.
Dr. Singh sought to further explain that this was driven by a $739.2M increase in collections from VAT on imports for goods. In contrast, he said, VAT collections on domestic supply reduced by $499.5M.
According to the Finance Minister, Excise tax collections amounted to $27.3B, which represents a 19.9 percent increase over 2012. He said that this was primarily attributed to increased taxes collected on fuel, which more than offset a reduction in taxes collected on motor vehicles.
“With an increase of 7 per cent, non-interest current expenditure amounted to $115.9B.”
He said that underlying this was a 10.6 per cent increase in employment costs, 9.8 percent increase in other goods and services, and 1.3 percent increase in transfer payments.
The increase in wages and salaries, he said, was due to the across the board five percent increase granted to all public servants, in addition to new recruitment, as services expanded across the country in the government sector.
The increase in other goods and services was attributed to increased spending on social programmes, along with increased infrastructural maintenance.
The increase in transfer payments was mainly on account of the increase granted to recipients of the old age pension, along with the introduction of the old age pensioners’ electricity assistance programme. Capital expenditure, according to the Minister, amounted to $50.1B, an 11.2 percent decline, “mainly as a result of timing issues in execution of some projects.”
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