Andrew Green and Keith Collister, Gleaner Writers
Dr. Omar Davies, the Minister of Finance and Planning, speaks during yesterday's opening of the Budget Debate in the House of Representatives. - RUDOLPH BROWN/CHIEF PHOTOGRAPHER
MINISTER OF Finance and Planning Dr. Omar Davies yesterday presented the nation with a budget showing no new taxes, but somewhat optimistic revenue projections.
The minister in fact announced a tax break for funeral costs up to $100,000, which should become exempt from the 16.5 per cent General Consumption Tax (GCT) from June 1. Farmers should also get an ease as agricultural inputs should be made zero-rated for GCT purposes also from June 1.
"The expenditure budget of $358.2 billion will be financed by revenues of $222.2 billion and loans of $136 billion," he told the House of Representatives. "There are no new taxes."
Despite the promise of no new taxes, a major portion of the $358 billion in planned spending for this financial year is to be financed from additional tax revenues. Revenues from taxes, which account for 87 per cent of overall Government revenues is forecast to grow by 20 per cent over the previous fiscal year.
PROJECTED GROWTH
Addressing the opening of this year's Budget Debate yesterday, Dr. Davies said this tax revenue growth "is underpinned by the projected growth in the economy, to be augmented by aggressive revenue enhancement measures."
There is a 10 per cent projected nominal growth in the economy, taking into account inflation, which should significantly boost tax revenues.
SPECIAL COLLECTION EFFORT
A "menu of administrative and legislative initiatives" is geared towards improving the tax system, reducing the incidence of non-compliance and boosting collections," the Minister said. Following the lead of one financial institution, he called on others in the private sector to ensure that those with whom they do business are tax compliant.
The audit coverage of very large firms has up to now been very inadequate, he said. The tax authorities have secured international help to provide guidance
Minister of Finance and Planning, Dr. Omar Davies, yesterday announced that the Government would be removing taxes from some items in the agriculture sector, reduce burial taxes and reduce interest rates on old loans from the Students' Loan Bureau (SLB).
THEY ARE:
Effective June 1, Funeral expenses of $100,000 and under will be zero-rated
Also June 1, items such as animal feeds, machetes, planting material including seeds, fishing apparatus, herbicides, insecticides and other items will again be zero-rated.
Effective September 1, the interest rates on old loans accessed from the SLB will be reduced to 12 per cent.
