Over the past few days, there has been considerable speculation about the amount of money collected by the Government from VAT. Already, it has been claimed that the Government has collected more than enough to pay public officers.
Consistent with the undertaking given by the Prime Minister and Minister for Finance and Economic Affairs, the Government is pleased to indicate the amount collected from VAT for the first month of operation. The Inland Revenue Department collected a total of EC$10.06 million. In turn, the Customs Department collected EC$15.08 million. The total amount collected is, therefore, $25.14 million.
It should be noted that the amount collected in VAT by the Customs and Excise Department is gross, meaning that a significant amount has to be refunded based on the refund mechanism of the VAT system. The amount to be refunded is being calculated and has not yet been determined at this time.
If the performance is evaluated on the basis of an eight-month period, that is to say from April to November, then the overall performance at the end of November 2012 would be slightly lower than the comparative period for 2011.
In 2010 the total amount collected in the taxes that replaced VAT that is consumption tax, hotel accommodation tax, environmental protection levy, cellular tax and motor vehicle rental fee was $125.41 million while in 2011 the total amount collected was $126.26 million. However, the cumulative amount collected in those taxes including VAT for the April to November 2012 period was only $125.81 million. In effect, there has been no windfall in collections in VAT for the first month of its existence, as claimed by some.
According to Prime Minister Dr. Kenny D. Anthony, “It is really in the next few months that we will get a better sense of how well the tax is performing. Understandably, there were anxieties in the first month of operation both from importers and consumers. As the tax settles, I would expect some improvement in collections in the months ahead.”