The Government has increased by 50 cents per gallon the excise tax on gasoline.
Prime Minister Ralph Gonsalves made the announcement during the Budget Address on Monday.
Gonsalves, who is also Minister of Finance, also announced lowered gasoline price and increased diesel price as part of the Government’s regular review of the retail prices of these fuels.
He said that the increased tax is expected to yield an additional EC$3 million per year.
The increased excise will not apply to diesel used in the production of electricity, which will continue to be exempted, Gonsalves said.
He said the increase in Excise is not expected to have any “immediate, significant upward impact” on the piece of fuel at the pump, as prices have been trending downwards in recent months.
In the case of gasoline, the entire 50 cents can be accommodated by the lower price of the fuel, which has moved from EC$14.08 to EC$13.95 per gallon.
However, the price per gallon of diesel has increased from EC$13.32 to EC$13.67.
Gonsalves made the announcements as he outlined the fiscal measures that his government will implement this year.
He said that in the current economic situation, globally and nationally, there is little room to raise taxes or large amounts of additional revenue.
“Similarly, there is little room to lower tax rates or to make additional tax concessions,” he told lawmakers in the Budget Speech, which comes in the wake of the devastating Christmas floods that have left EC$330 million in loss and damage, according to Government estimates.
“Our fiscal policy stance for 2014 will therefore continue to be a mix of prudence, patience and enterprise,” Gonsalves said.
He said that in 2013, there were deficits on the current, primary, and overall balance of 2.3 per cent, 3.9 per cent, and 6.3 percent of GDP, respectively.
“The recurrent expenditure was reasonably restrained save and except for the ballooning cost of pension and retirement benefits and salary increase occasioned by the built-in 2 per cent increment and the 1.5 per cent back-pay from January 1, 2011,” he said, in reference to a salary hike due to public servants since 2011 but paid last year.
A 7.2 per cent decline in revenue during 2013 also contributed to the current account deficit.
“The decline in revenue was disappointing coming as it did in a year when nominal GDP was estimated to have grown by approximately 5 per cent,” Gonsalves said.
He further said that while capital receipt increased almost four-fold, it was not enough to outweigh the increase in capital expenditure of almost 180 per cent.
“As a consequence, the overall deficit widened,” he said.
Gonsalves also said there was a decline in tax buoyancy.
This was attributable to weakness in tax administration at the major revenue collection departments, low and declining level of tax compliance by certain taxpayers, and increased level of tax concession, particularly ad hoc concessions, he said.
He said the need for continued institutional strengthening and capacity building of the major revenue departments has become more evident.
Gonsalves presented a budget for EC$911 million, reflective of the Estimates Parliament approved in December.
He, however, indicated that supplementary estimates will be brought to Parliament in four to six weeks to take into account spending necessary as a result of the loss and damage the country suffered during the passage of the trough system on Christmas Eve.
The Budget Debate gets underway on Tuesday, beginning with the response from Leader of the Opposition, Arnhim Eustace.
Thanks Kenton, I was waiting for some kind of tax. I love the poor, I love the poor so much, that I love to tax them to death. I hug them up and tax them, I sit on the road with them and tax them. I tax them to death, but it’s tax out of love Hhaha.
When are Vincentians going to get this guy out of office, all he does is Tax and squeeze Vincentians, who does he think is going to pay those taxes, it’s the very same people you say you love you are taxing sir. The last thing to tax would be the air that Vincentians breath. Under James Michelle SVG had some of the lowest Taxes in the world, but under Hurricane Ralph, we getting a new tax every monday morning. If that is love then it’s better you hate us comrade, because you can’t threat us any worst.
Vincentians, time to get this tax man out of office.
Gas has only decreased 12 cents according to the figures quoted. So a 50 cents tax is no where close to being accommodated by that small drop in price. No matter the spin attempted to disguise the truth, the fact is consumers will be paying an extra $5 to $10 on average at the pump per fill up than they otherwise would have. For a minibus operator, that works out to $250-$350 a month extra in fuel costs. Who accommodates that?
Like this man want to kill us… tax going up but u not hearing a thing abt salary… look we no face a national disaster some ppl can hardly see there way through yet he still pressuring us…
Well hold on here guys! How then would the government finish the airport? This is an investment that is supposed to be able to bring in donations when there is a flood, or other disaster. We also need a better and more equipped hospital, just in case there is a plane disaster. With all these additional expenses the man had to tax the hell out of tax payers. I believe Vincentians are prepared for this, because no one is complaining – well except you guys.
For those dreamers who thought the airport is an asset – dream on! This will be an albatross around Vincentians neck for many years to come. If LIAT is a welfare case, then how far back is the airport?
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