Finance minister to review tax measures... will make announcement Wednesday
Finance minister Dr Peter Phillips said he will announce on Wednesday whether there will be any changes to the $6.7 billion tax package he announced last week.
The minister, who today told trade union leaders that he is reviewing the measures, told The Gleaner that he is consulting with stakeholder groups as part of the review.
"What is non negotiable is that we have to get the revenues to enable us to meet the primary surplus target," Phillips said.
He told The Gleaner that he will make the outcome of his review known when he closes the 2014-2015 Budget Debate on Wednesday.
Among the measures outlined by Philips is a levy on financial institutions on the withdrawal of funds.
Several civil society actors have opposed the measures, and there is fear that the banks would be passing on the cost to their customers.
Earlier this week, Phillips said the tax measures announced represent the most palatable alternatives.
He noted that several alternatives were rejected.
These include increases in the rates of GCT, personal income tax, as well as the imposition of GCT on electricity, the imposition of a tax on sweetened drinks such as soda, and increasing the tax take from petroleum.
He said the tax options selected would cause less burden for the poor and vulnerable in the society.
The Government is proposing to spend $540.1 billion this fiscal year and is expecting to raise $421.2 billion to go towards its financing.
Phillips said loans of $110.9 as well as the utilisation of $1.4 billion, which represent balances in the banking system, will be added to the $6.7 billion in new taxes to finance the Budget.
He further said the Government was projecting to raise $377.6 billion in taxes, which represented 9.8 per cent more than the out-turn last fiscal year.
The tax revenue projected is estimated at 23.4 per cent of GDP, and includes $3.2 billion already announced for minimum business tax, the betting gaming and lotteries sector, as well as the tidying up of customs regulations.
Phillips said it is absolutely necessary that the country stays the course of its economic reform programme, a critical plank of which is to reduce the debt.
The country must run a primary surplus of 7.5 per cent of GDP, based on its agreement with the IMF.
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