Expenditure funding to come from four sources

The Government is chasing revenue from VAT and oil companies’ taxation to fund its expenditure, according to the National Budget document, “Draft Estimates of Revenue.” The document said Government expenditure will be funded by revenue from four sources — tax revenue (73 percent), non-tax revenue (11 percent), capital receipts (two percent) and financing (14 percent). The tax revenue will be a record $15.47 billion (up from a 2003 estimate of $12.65 billion and revised estimate of $14.01 billion); non-tax revenue will be $2.41 billion (up from $2.36 billion and $2.46 billion respective estimates in 2003); capital receipts will be $357 million (compared to 2003 figures of $361 million and $43 million); and financing is $3 billion (compared to 2003 figures of $4.16 billion and $2.24 billion).

Some 65 percent of “tax revenue” or $10.034 billion will come from “taxes on income and profits,” while 27 percent or $4.207 billion will come from “taxes on goods and services.” Of $10.034 billion in “taxes on income and profits,” oil companies will pay the bulk, some $4.96 billion (up from a 2003 estimate of $2.72 billion and 2003 revised estimate of $4.14 billion). Taxes paid by individuals are forecast at $2.76 billion, while taxes from other companies are estimated at $1.81 billion. The “taxes on goods and services” are estimated at $4.207 billion, chiefly comprised of VAT and Excise Duties.  Following the Budget speech’s promise of “a comprehensive review of the VAT regime,” the Government hopes to boost its VAT collection by 40 percent on the amount collected last year.

It estimates VAT collection will be $2.754 billion, up from $1.973 billion actually collected last year, a figure which had been downwardly estimated from an initial, optimistic $2.579 billion. Excise Duties are estimated at $1.058 billion. Still under the head of “taxes on goods and services,” the document estimated revenue from the subhead of “betting and Eentertainment taxes” at $8.93 million, similar to last year’s figure. Interestingly, despite the huge splash made in the Budget speech by the increase in gaming taxes, no mention was made of how much total revenue the Government hoped to get from this. Most or some 73 percent of the Government’s non-tax revenue will come from property income, forecast at $1.742 billion.