Tax revenue exceeds Lm734 million

Total revenue from tax last year rose by Lm45 million, or 6.5 per cent, over the previous year, and amounted to Lm734.2 million, the National Statistics Office said yesterday.

Tax revenue can be broadly classified under three headings: Indirect taxes, direct taxes and social security contributions.

Indirect taxes, at Lm335 million, make up 45.6 per cent of total tax revenues. This category includes VAT, import duties, excise and other specific taxes on services and on financial and capital transactions.

Under this heading, VAT is the most important component, followed by taxes on products, including excise duties.

Last year, revenue from excise duties - mainly on cigarettes and petroleum - reached Lm62.2 million, while VAT netted Lm175.4 million.

Direct taxation made up 35.9 per cent of the total tax revenue, one percentage point higher compared to 2005.

An increase of Lm30.7 million in income tax was in part offset by a reduction of Lm5.9 million in "other current taxes". This decline was due to receipts under the "investment registration scheme" applicable in 2005, but which were not repeated last year.

While actual cash receipts of social contributions recorded a year-on-year increase, when adjusted for accruals, this category of tax dipped by Lm4.5 million.

The overall tax burden, defined as the total amount of taxes and actual social contributions expressed as a percentage of GDP, edged up to 34 per cent, from 33.9 per cent in 2005, the NSO said.