DON'T be fooled. Today is Easter Monday, but while it has all the makings of a happy ending to Lent, a public holiday which also closes the carnival season and recalls the traditional April Fool's Day, it also marks the implementation of a number of key tax measures announced by the Government in February.
These taxes were among a number of revenue measures announced in the House of Representatives on Tuesday, February 12, by Minister of Finance Dr Peter Phillips to raise $16 billion in revenues by March 31, 2014.
Dr Phillips explained that the revenues were critical to Government's efforts to meet a 7.5 per cent surplus target, a requirement of a still-elusive new agreement with the International Monetary Fund (IMF).
The measures which take effect today are: an increase in property taxes to raise $3.4 billion; a 15 per cent increase in the tax dividends payable to residents to raise $800 million; imposition of a 5 per cent increase on surtax on the taxable income of "large unregulated companies" to raise $1.2 billion; a 0.25 per cent increase in the education tax rate to raise $2.8 billion; application of a Custom Administration Fee (CAF) on imports replacing the current Customs User Fee (CUF) to raise $1.2 billion; an increase in the local stamp duty rate and transfer tax on properties to raise $2 billion; and an increase in the tax on the gross profits of gambling/lottery operations to raise $1.5 billion.
Other measures included in the package which already took effect from Friday, March 1, were: fees and taxes paid at the ports, such as the Environmental Levy, Customs User Fee, Common External Tariff included in the General Consumption Tax (GCT) base which should yield $1.5 billion; an amendment to the legislation to account for the collection of GCT on the face value of prepaid phone cards and inclusion of Telephone Call Tax in the GCT base expected to yield a total of $1.5 billion.
The package is expected to yield a combined $16 billion in financial year 2013/14, which commences today. Phillips is to table the budget for the new financial year in the House of Representatives on Thursday, April 4, hours after the Governor General Sir Patrick Allen delivers the Throne Speech at the official opening of the 2013/14 session of Parliament at Gordon House. Two weeks later Phillips will open the budget debate which, he insists, will not include any major new taxes.
The Opposition is against the property tax increases and their spokesman on finance, Audley Shaw, suggested in the House that the Government put on hold implementation of the increases, and await a property revaluation exercise currently in train.
But Dr Phillips has resisted the request, noting that if the property tax measures were to support the revenue needed to meet the surplus in 2013/14, they would have to be implemented immediately.
"We need the revenues now...We need to bear in mind that the property tax rate must be in place as of April 1," he told the House recently. However, he promised that after the revaluation, the Government would re-examine the rates.