IRC expects K2bil drop in taxes

By SHIRLEY MAULUDU
THE Internal Revenue Commission (IRC) projects the overall tax revenue collection for the 2020 National Budget to decline by K2.16 billion, commissioner-general Sam Koim says.
Koim told The National that the projected reduction in revenue is due to the Covid-19 and associated impacts.
“As of April 2020, we have projected the overall tax revenue collections for the 2020 budget to decline by around K2.16 billion,” he said.
“That is not far from the K2 billion revenue shortfall projected by the IMF (International Monetary Fund).”
Treasurer Ian Ling-Stuckey said in his ministerial statement on economic stimulus package that was presented in Parliament in April, noted that Government deficit was expected to increase to K6.63 bil from K4.6 bil projected last November during the 2020 Budget presentation.
“We are trending below 7 per cent of our year to date target as of this date,” Koim said.
“Our study methods were based on macro-simulation models focusing on the national income identity (GDP) and shocking them with the global supply and price impact due to the Covid-19 virus pandemic.
“These were then fed into the industries and enterprises through the income proxy of each tax-paying agents.
“Our simulation exercises using both a mild-case scenario (conservative) and a worse-case scenario both showing significant decline in business activities, both supply and demand sides, thus affecting tax-revenue collections.