Thanks to new measures…Tax revenue represents over 80 percent of total revenue collection

Aug 07, 2017 News

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– Finance Ministry

Several tax measures which were introduced in the 2017 budget last year have proven to be worthwhile efforts on the part of the Government. These measures have actually helped to increase government’s revenue collection significantly this year.
This is according to the half year report which was prepared by the Finance Ministry.
According to the report, revenue collection increased to $97.2 billion at the end June, 2017. This is a13.1 percent increase above the corresponding period in 2016.
The Finance Ministry said, however, that this year’s tax revenue represents 88.3 percent of total revenue collection. This is an indication of the magnitude of the contribution Guyana’s traditional sectors have made thus far towards total revenue collection.
With regard to internal revenue collections, the Finance Ministry said that this increased by $5.0 billion, reaching $41.6 billion during the first half of 2017, compared to $36.5 billion in the same period of 2016.
The Ministry said that this increase was primarily attributed to a growth in corporation tax payments of $2.3 billion by several companies in the manufacturing and services sectors as well as the natural resource sector.
As for withholding tax, the Finance Ministry found that this grew by $865.5 million, or 27.2 percent, mainly due to payments by two companies providing support services to the oil and gas sector, and interest earned on savings accounts at commercial banks. Of the amount collected, the Ministry said that almost $191.9 million was arrears.
The Finance Ministry also noted that collections of personal income tax during the first half of 2017 were $265.3 million above the $10.6 billion collected in the same period of 2016. It said that employers compliance increased by six percent, with 1,777 employers making payments during the period January to June 2017 and nearly $1 billion in arrears was collected.
Collection of customs and trade taxes grew by $5.6 billion, in the first half of 2017 compared to the same period in 2016. The Finance Ministry stated that Value added and excise taxes increased by $2.04 billion and $1.96 billion respectively, reaching $19.29 billion and $16.84 billion, respectively, during January to June 2017.
The Finance Ministry said that value-added tax (VAT) from imports of goods grew by $1.2 billion, partly as a result of policy changes in Budget 2017. It said that the value added tax on domestic goods also increased by $838.5 million primarily due to higher payments from the telecommunication, and wholesale and retail trade sectors.
Furthermore, the Finance Ministry said that revenue collection from petroleum products increased by $3.2 billion to $10.9 billion, offsetting the reduction in excise tax on motor vehicles during the reviewed period.
It was observed that Excise tax collection on motor vehicles declined by $1.5 billion to $2.9 billion compared to $4.4 billion, during January to June 2016. However, revenue collection from excise taxes on domestic alcoholic beverages increased by $238.0 million to $2.1 billion due to the Budget 2017 measure that amended excise taxes for alcohol consumption and higher sales of beverages on the local market.
With regard to Travel taxes, the Ministry said that this was 23.0 percent higher than the January to June period in 2016. The Ministry said that this growth resulted from a combination of a $1,000 increase in the airport departure tax as well as a 6.3 percent increase in the number of departing passengers.
The Finance Ministry also stated that total non-tax revenue rose by $567.4 million to $11.3 billion during the first half of 2017 compared to the same period in 2016. The increased collection reflects higher transfers from statutory agencies during the review period.
The Finance Minister said that fees, fines and charges also reported a 4.2 percent increase to $684.0 million at the end of June 2017. However, rent and royalties declined by 32.3 percent reflecting lower gold declaration from both Troy Resources and Guyana Goldfields.
The Finance Ministry stated that the remissions of tax for the first half of 2017 were $24.5 billion or 28.6 percent of tax revenue. This compares with remissions of $20.7 billion or 27.5 percent of tax revenue in first half of 2016.
The increase was in the categories of companies/businesses, $3billion; Ministries and Government Departments, $1.4 billion; and foreign funded projects, $488.8 million.
Decreases in remissions granted were in the categories of diplomats, $284.5 million; remigrants, $348.8 million; churches/charitable organisations, $275.5 million; hospitals, $66.6 million; and public officials/officers, $47.8 million.
Furthermore, a sum of $16.9 billion was expended under Other Goods and Services, a 6.3 percent increase over the same period for 2016. This is attributed to the early passage of the 2017 Budget which facilitated early commencement of the 2017 work programme in several areas.

 

 

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