Shaw’s tax-take jumps sharply

Excluding divestment proceeds of nearly $15 billion government revenues from taxes, fees and grants are ahead of budget by $13 billion to August this year and are ahead of the same period in 2015, by 18 percent or $20 billion.
The big increase over 2015, includes very little new taxes imposed in the budget presentation in May, this year. The increase over 2016 fiscal year annualises out at $48 billion and $60 billion when the new taxes are included. Compared to budget, revenues are running at $31 billion ahead of forecast on an annualised basis.
It means that Minister Shaw has fully funded the revenues given up by increasing the PAYE tax threshold, well ahead of the year-end and just around the time the reduced PAYE taxation takes effect to affect tax revenues with August being the first month that the reduced payment would be effected. PAYE enjoyed inflows of $1.9 billion more than planned, bringing in $29 billion to August. In 2015 for the same period, a total of $28.45 was generated from this item.
While revenues climbed sharply, expenditure so far is well below forecast by $13.8 billion. Employees’ compensation is down by $2.7 billion, interest cost shaved $2.5 billion off forecast, capital spend so far, is under spent by $7 billion and other expenses are down by $2.5 billion. The net effect higher revenues and reduced cost is a reduction of the fiscal deficit that was projected at $46.2 billion and ended at $19.5 billion, $26.7 billion less than planned. The primary surplus is running well ahead of plan with an out turn of $41.65 billion up from $17.5 billion budgeted.