Taxation continues to drive increased Govt. revenue

May 08, 2017 News

The expansion of tax collection in Guyana continues to maintain its position as one of the major contributors to revenue for central government. According to the Ministry of Finance, central government revenues amounted to $8.3B in February, 2017, a 3.8 percent increase compared to February, 2016.
This growth, according to the Ministry, was principally driven by an expansion in tax revenues due to increased arrears collection and greater compliance. This is according to data provided by the Ministry of Finance in its March, 2017 Economic Bulletin.
According to the bulletin, the revenue collection to date for central government stands at $21.4B compared to $17.4B which was collected during the same period in 2016.
Further, the report stated that tax revenue collections amounted to $8.5B in February of this year, compared to $7.3B collected in February, 2016. With this increase, the report disclosed that the total tax revenues at the end of February 2017 reached $20.5B compared to $15.9B, which was collected during January and February of last year. This represents a 29 per cent increase.
According to the Ministry, this growth was as a consequence of increased taxes for companies, withholding and international trade, which grew by 108.5 per cent, 39.3 percent and 21 percent respectively. Additionally, there was growth in personal income tax which increased by 19.1 percent.

Finance Minister, Winston Jordan

These improvements, the Ministry said, were attributed to rising arrears collections for company taxes; increased compliance for personal income taxes; growth in the real value of imports for trade taxes and increased gold declarations for withholding taxes.
There was also an increase in Value Added Tax (VAT) which totalled $2.4B in February 2017. This brings collections to date to $6.1B, which is a 5.5 per cent growth in the value of imports.
An increase of 67 percent was recorded in excise tax collections, when compared to 2016. According to the report, $2.2B was collected in February 2017, bringing the total collection for the year so far to $4.5B. The Ministry said that the expansion in excise revenues was as a result of higher petroleum revenues.
Minister of Finance, Winston Jordan, had said in his 2017 budget speech that Central Government revenue is expected to increase by 6.4 per cent to $186B. He added that Tax revenue is expected to increase by 8.9 percent to $162.6B. Jordan said that this would reflect a considerable increase in collections of VAT, due to the measures to be implemented in 2017.
He added that VAT collections are projected to increase by 1.7 percent to $36B and excise tax collections holistically will decrease by 10.4 percent to $29.9B.
Meanwhile, as it relates to Government’s expenditure for 2017, the Finance Ministry said that this amounted to $14B as of February compared to $10.9B which was spent in the same month last year.
This increase, according to the Ministry was primarily as a result of growth in non-interest and capital expenditure due to the early passage of Budget 2017. The report stated that the year-to-date total expenditure stands at $29B, a $10.9B increase when compared to the same period in 2016.
Non-interest expenditure totalled $11.4B in February 2017, compared to $9.6B in February 2016. As a result, the total non-interest expenditure for the year so far has reached $24B compared to $16.7B spent in January and February 2016.
This growth has been attributed to expansion in the areas of employment, other goods and services and transfers which increased by 16.2 per cent, 58.7 per cent and 62.3 per cent respectively.

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