THE following are details of the revenue measures outlined in Ministry Paper # 15, tabled in the House of Representatives on Tuesday by Finance Minister Peter Phillips. The measures are expected to yield $16.4 billion in new taxes for the fiscal year.
Special Telephone Tax
(1) Inclusion of the Special Telephone Calls Tax (TCT) as part of the base for General Consumption Tax (GCT) calculation. The TCT was introduced on July 15, 2012 on all minutes used by mobile phone users at 40 cents per minute. Effective date, March 1, 2013. Revenue projection $13 billion.
(2) Inclusion of all fees and taxes paid at local ports, including Environmental Levy, as part of the GCT base. Effective date, March 1, 2013. Revenue projection $1.5 billion.
(3) Amendments to the GCT Act for GCT on the face value of prepaid vouchers/airtime paid by telecommunications providers, which will impose GCT on the full cost of phone cards used by mobile phone users instead of GCT on the wholesale price. Effective date, March 1, 2013. Projected revenues, $200 million.
Tax on dividends
(4) Increase on the tax on dividends payable to residents to 15 per cent. Effective date, April 1, 2013. Projected revenue $800 million.
Tax on large companies
(5) Imposition of a five per cent surtax on taxable income of large "unregulated companies", or companies valued at $500 million or more. Effective date, April 1, 2013. Projected revenue $1.2 billion.
(6) Increase in the Education Tax rate by 0.5 percentage points for employers and .25 percentage points for employees/self-employed. Effective date, April 1, 2013. Projected revenue $2.8 billion.
Customs Administration Fee on imports
(7) Application of a Customs Administration Fee (CAF) on all imports, except for charitable organisations and the bauxite sector. Effective date, April 1, 2013. Projected revenue $1.2 billion.
Stamp Duty and Transfer Tax
(8) Increase in Local Stamp Duty rate and Transfer Tax (on properties) from three and four per cent to four and five per cent, respectively. Effective date, April 1, 2013. Projected revenue, $2 billion;
Tax on gaming
(9) Amendment to the fee and gross profit structure for Betting, Gaming and Lotteries covering SVL games such as Cashpot and Lotto, to be increased by two-three per cent. Implementation date, April 1, 2013. Projected revenue, $1.5b.
(10) Reform of Property Tax Regime and measures to increase low compliance rate. Flat rate of $1,000 for first $100,000 of unimproved value, 1.5 per cent up
to $1 million value and two per cent for value over $1 million. Implementation date, April 1, 2013. Projected revenue,
Transfer Pricing Rules
(11) Legislation is to be introduced to provide for the introduction of Transfer Pricing Rules and Thin Capitalisation Rules. No implementation date nor projected revenue has yet been determined.