Budget Speech 2011 - Government of Grenada

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In respect of Excise Tax, $8.3 million was collected, $13.2 million short of the approved estimate. These shortfalls can be directly attributed to additional concessions on VAT and Excise Tax made by Government after the presentation of the 2010 Budget. For example, the zero-rated and exempt schedules under VAT were expanded to include bread and medicines for chronic diseases. Later, Government removed VAT on textbooks, lowered the rate on building materials and removed VAT on service charge for hotels. The revenue forgone from these additional concessions was $11.7 million. In the case of Excise Tax, Government granted a 10% rebate to manufacturers on their sales which they were allowed to offset against their excise tax liability. Moreover, in the final quarter of the year, Government agreed to temporarily remove excise tax on new motor vehicles. The revenue forgone from these additional concessions was $12.7 million. Without these concessions, the revenue collected from VAT and Excise Tax would likely have surpassed the approved budget of $164.7 million by at least $3.0 million. Mr. Speaker, of considerable significance is the fact that VAT (net of refunds) and Excise Tax exceeded the combined 2009 revenues from GCT, airline ticket tax, and motor vehicle purchase tax by $16.1 million. In sum, we can conclude that VAT did well in its first year and is settling down. Mr. Speaker, I wish to place on record our appreciation for the staff who implemented these replacement taxes. In particular, we thank Mr. Melville Hosten, the Comptroller of Inland Revenue, the VAT Unit led by Ms. Pauline Peters as well as the Customs and Excise Department led by Mr. Carlyle Felix. We also thank businesses for their reasonably good compliance record. We note that the compliance rate on VAT was at least 80% throughout the year. 2011 Budget Statement Page 19
This year, our VAT Unit will intensify the public education campaign and will vigourously pursue persons who are attempting to defraud Government of its revenue after collecting it from consumers. September (2010) Stimulus Package The stimulus economic package announced by the Prime Minister last September is already having its desired impact. The initial results show the following: • Following the introduction of the Excise Tax, the average number of new vehicles sold each month was 24. After the removal of Excise Tax, the average number of new vehicles sold each month rose to 39, an increase of 63%. • No VAT on service charge helped hotels improve their cash flow and preserve jobs. • A 50% reduction in VAT on construction inputs has resulted in lower prices and improved sales on building materials such as cement and roofing material. Most importantly, there was heightened economic activity in the final quarter of 2010. 3.3 Achievements and Shortcomings Mr. Speaker, despite the difficulties of the past year, our Nation can point to several notable achievements. Allow me to cite a few examples: Selected National Achievements On the field of athletics, Kirani James was named Central American and Caribbean Junior Male Athlete of the Year after winning 400 metre titles at CARIFTA, NCAA Outdoors and the World Junior Championships. In football, Grenada performed well to reach the semi-finals of the Digicel Cup and in so doing qualified for the Gold Cup. Page 20 2011 Budget Statement
Page 1 and 2: GOVERNMENT OF GRENADA 2011 Budget S
Page 3 and 4: 5.8 Strengthening Economic Manageme
Page 5 and 6: Page 4 2011 Budget Statement
Page 7 and 8: At home, many of us lost loved ones
Page 9 and 10: not accompanied by significant job
Page 11 and 12: Mr. Speaker, the data show that the
Page 13 and 14: 3.0 LOCAL DEVELOPMENTS 3.1 Performa
Page 15 and 16: In an effort to provide additional
Page 17 and 18: It is useful to understand how Gove
Page 19: Based on the revised GDP, Grenada
Page 23 and 24: Improving the Business Climate •
Page 25 and 26: o o 6 acres of avocados 10.6 acres
Page 27 and 28: • Provided every primary and seco
Page 29 and 30: Violence Act - landmark legislation
Page 31 and 32: We pointed out that there are sever
Page 33 and 34: We commenced the process of tax ref
Page 35 and 36: In preparing this strategy we have
Page 37 and 38: will depend on two additional criti
Page 39 and 40: The individual freedoms we enjoy in
Page 41 and 42: Public Debt - $188.3 million (or 24
Page 43 and 44: 4. Improved marketability of fish p
Page 45 and 46: Support for Airlift It should be no
Page 47 and 48: in securing vacations and is workin
Page 49 and 50: We are working closely with the Off
Page 51 and 52: to explore the technical and commer
Page 53 and 54: the three (3) sites, thus negating
Page 55 and 56: In a real sense, C@ribNET is a cata
Page 57 and 58: And Grenada is not alone. Having re
Page 59 and 60: Project Grenville Market Developmen
Page 61 and 62: The report showed that of the perso
Page 63 and 64: To our dismay, the design works wer
Page 65 and 66: Its development goal is to contribu
Page 67 and 68: Programme. This initiative will tar
Page 69 and 70: VI. Support for Existing Businesses
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and we will continue to offer that.
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persons whose employment was involu
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This year, Government will continue
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9. Creating training and educationa
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The Grenada Home Improvement Scheme
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4. To commence work on the Top Hill
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The Sustainable Development Council
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The updated Public Service Rules an
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These achievements included: • Su
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all sectors of our society. NaDMA w
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The Organisation of Eastern Caribbe
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Mr. Speaker, we have articulated a
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Page 94 2011 Budget Statement
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Budget Speech 2011 - Government of Grenada

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