There was a net reduction of tax revenues by $1.2B

Dear Editor,

On July 13, the media reported Minister Jordan as saying that Central Government’s revenues increased by 5.9% or by $3B as of April 2016 compared to April 2015.

The minister must have seen it necessary to make this statement in light of several comments that the economy was contracting. He was obviously trying to talk up the economy to boost confidence.

In pursuit of this, he used statistics to prove his points.

A close examination though would reveal that his statistics were actually trying to hide the serious decline in economic activities.

According to the minister, between January to April 2016, the net increase compared to last year was $3B. This included an increase of non-tax revenues of $4.2B, mainly because of increased gold production from the two large mines that came into commercial operations late last year.

What the stats tried to hide is the net reduction of tax revenues by $1.2B over the previous year.

This is so even though tax revenues increased for some tax types by more than $2.1B against 2015. This is because of the poor performance of other revenue types, mainly VAT, with an overall negative impact of $3.3B (1.2 + 2.1). Therefore, revenue from tax collection over 2015 was down by $1.2B net.

That is an indication that the economic activities have declined. If this trend continues, we are looking at hard times ahead.

No amount of statistics would be able to mask this.

Yours faithfully,

Donald Ramotar

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