By Elesha George
The Inland Revenue Department (IRD) is witnessing an improvement in tax collections, similar to figures recorded before the peak of the Covid-19 pandemic.
Commissioner Ralph Warner said that tax collection has continued to rebound up from 2021 figures and has held steady so far for the year.
The Inland Revenue Department accounts for 53 percent of central government revenue through tax collection and 46 percent of the government’s overall revenue.
Warner, who was addressing a tax forum last week, said that shutdowns and restrictions had significantly affected sales revenue (ABST) as well as property tax and stamp duty in 2020 – a year he described as being “severe” for tax collection in the twin island state.
“In 2020 that’s when our hotel sector basically closed down, so the fact that we weren’t receiving revenue from that sector had an overall impact on the overall revenues.
“In 2021, there was rebound and in 2022 there was a further improvement in tax yield,” he said.
Since then, the Commissioner shared that the department has been collecting more revenue, returning to its “pre-Covid era” where it collected upwards of EC$400 million annually.
“In 2021, we even surpassed what we collected in 2019. I think in 2019 our figure was around $400 million, in 2020 that dropped to around $300 million and in 2021 we went back up to our normal figure which is over $400 million,” he explained to Observer.
The increase was supported by a number of new revenue streams, which the Commissioner said were derived from individuals who had formed new businesses after being laid off or quitting their jobs during 2020 and 2021.
Warner said the telecommunications sector and small businesses filled the shortfall left by the biggest tax contributor – the tourism and hospitality industry – which came to an abrupt stop when Covid cases began to rise globally.