Commissioner General of the Internal Revenue Commission, Sam Koim, says the IRC can suggest to government on reducing Salaries and Wages Tax (SWT) if they generate enough revenue through effective collection, especially through Goods & Services Tax.
Koim said they can make the recommendation once they can create enough fiscal space for the National Government.
Koim said this at the launching of the Merger between Section 65A of the GST Act and the Integrated Financial Management System.
He said currently there is a huge tax gap, especially in GST collection and focusing on GST they believe they can make enough money for the Government.
Unlike SWT, which is paid by a small percentage of the country’s population, Koim said GST is paid by everyone.
“GST is a tax that is broad-based and everybody in this country participates in contributing one way or the other. And if we set up effective collection mechanisms and we collect all the GST areas that we collected, I believe we can create enough fiscal space, we can generate enough money,” said Koim.
He said with the effective collection of GST they can create fiscal space for the Government and suggest reductions in others taxes, such as SWT.
“We can offer suggestions to the Government that now we’ve taken ownership of the existing size of the pie, you can now explore reducing the salaries and wages taxes. At the moment we can’t offer that because at this time, the Government is also facing financial stresses. And so it would be suicidal for us to offer that,” said Koim.
Currently SWT remains as the number one tax revenue earner.
The IRC intends to make GST the top tax revenue earner.