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Prime Minister Dr. Kenny Anthony, in his national address on all television stations Sunday night, said “there has been much talk about the Value Added Tax (VAT) and its impact on revenue. Some even say that the Government has had a VAT windfall and so can pay”.
But he said “based on the early trends, VAT collections appear to be in line with what was expected”.
He explained: “It does not appear that it will be much higher than the $120 million that was budgeted for this fiscal year, adjusted for the one-month delay. Because this amount had already been budgeted for in the 2012 Estimates, VAT will not provide us with any additional or new resources this year and therefore cannot be factored as money which is available to pay public officers this year.
“In other words, our projected revenue shortfall this year takes into account our VAT collections. This confirms what we have always stated: VAT’s main effect is to simplify the collection of taxes by replacing a range of taxes like Consumption Tax, Environmental Levy, Cell Phone Tax and Hotel Accommodation Tax, among others.”
In December, government reported that it collected $25.14 million from the first month of VAT collection.
The Inland Revenue Department collected a $10.06 million and the Customs Department collected $15.08 million.
The government however 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”.