Friday, 12 August 2022 14:39

Income Tax in 2022 has increased 30.5% from january to july 2022

Written by Evelyn Alas

The Ministry of Finance (MH) indicated that the collection of Income Tax (ISR) accumulated US$1,909.7 million in the period from january to july 2022.

For example, ISR collection versus the same period of 2021 grew US$446 million, equivalent to 30.5% more.  It is also US$210.5 million more than what the referred Ministry had projected when preparing this year's budget: in other words, the estimates were exceeded by 12.4%.

This Ministry emphasizes that income tax revenues are now performing better than VAT.  For example, in the seven months detailed in the Treasury's report, VAT has an accumulated contribution of US$1,796 million, which is a 12.7% increase compared to 2021.

However, this tax also shows less dynamism compared to Income, since its contribution to the total is U$113.2 million and it is growing at half the rate.

The Ministry of Finance details that more Renta has been obtained than VAT allows concluding that the authorities have managed to diminish the inequities in the tax system.  This is because the income tax is calculated according to the economic capacity of the taxpayers, even there are groups exempted from the declaration, according to their income level, while the VAT is applied according to the consumption (the lower the value consumed).

The ISR for payment on account reached ÙS$380.3 million, an interannual increase of 21.7%; the withholdings reached ÙS$792.3 million, an increase of 20.2%; and the declarations US$737.2 million, an increase of 49.8%.

The increase in State revenues is reflected in all the connectivity works that are being executed simultaneously, the economic relief measures in the face of the crisis, the delivery of computers, COVID-19 protection and dozens of other works.