Tax revenue is anticipated to decrease by more than K250 million from the 2017 Budget projection, according to the Mid Year Economic and Fiscal Outlook (MYEFO) Report 2017.
Tax revenue, which covers income, profits and capital gains, is projected to decrease by K284.2 million and now predicted to stand at K5,534.7 million under the MYEFO, relative to the 2017 Budget estimate of K5,818.9 million.
The MYEFO says this is driven mainly from a reduction in company income tax, anticipated to be lower by K290.3 million.
In the first half of the year, the company income tax amounted to K647.5 million, which is 27 percent of the budget estimate.
The report states weak receipts collections reflected reduced profits of businesses as they adjust to current economic environment.
The personal income tax (PIT) collections in the first half of the year amounted to K1,498.2 million or 49.0 percent against the Budget estimate of K3,035.7 million. Increase in lodgments from new taxpayers was driven by a compliance exercise.
The Mining and Petroleum Tax estimate at the 2017 Budget was K154.3 million. Collections in the first half of the year amounted to K41.7 million or 27.0 percent against the 2017 Budget estimate.
The MYEFO further adds that with prices of key mineral exporters above the 2016 levels, receipts are expected to be better than 2016 outcome of K92 million.
The dividend withholding tax and interest withholding tax collections in the first half of the year totaled 51 percent and 56 percent respectively relative to the 2017 Budget estimates.
Collections for these two tax heads are expected to strengthen in the remaining six months of the year to achieve the 2017 Budget estimate.
Tax revenue comprises income, profit and capital gains which encompass the following:
- Personal income tax
- Company tax
- Mining and petroleum tax
- Royalties tax
- Management tax
- Dividend withholding tax non-mining
- Interest withholding tax
- Sundry IRC tax and income