GST to increase by 22pc in ’22

THE goods and services tax (GST) is expected to increase by more than 20 per cent as per the 2022 National Budget figures, PricewaterhouseCoopers tax partner Peter Burnie says.
In his budget commentary on Tuesday, Burnie said the Government had been transparent in the budget figure for next year.
“When we looked at the Budget this year, and when we talk about how the overall economic increases can the tax make, the number of GST is the single largest that is looking to be collected between 2021 and 2022,” he said.
“The rate of GST increase is expected to be 22 per cent.
“There is a lot of transparency around things in terms of how the breakdown is done.
“If you look at the budget books you can drill all the way down to expenditure, you can drill all the way down to understanding categories put into very small units – the Government units of the public sector. That is an incredibly useful detail of transparency.
“If you do have the time to read volume one, you can have a lot of detail.
“The growth in GST seem to apply a significant growth in just the level of business activity.”
Burnie highlighted non-tax revenue areas as another area of revenue generation by the Government.
“The other significant growth or focus area of Government is actually in the non-tax revenue which in this circumstance is actual dividends from state entities, an increase by several hundred million kina year-on-year.
“But in order to generate dividends from those State-owned entities, most need to operate in an environment in which they are allowed to generate additional profits to Government.”
Meanwhile, commenting on the dominant industry player tax, Burnie said there was not enough information on why the expected annual figures were set at those particular targets.
“Potentially, this levy will allow to only one entity to each of those markets.”
He said company in the banking was expected to generate K190 million annually, and in telecommunications, it’s K95 million.
“There is not a lot of messages around why those amounts? Why not half those amounts or double those amounts?”