HAITI: REVENUE COLLECTION

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E.O. 12958: N/A
TAGS: ECON EAID PGOV PINS HA
SUBJECT: HAITI: REVENUE COLLECTION


1. Summary: GoH revenue collection for fiscal year 2006
(ending 9/30/06) was approximately ten percent higher than
projected, due mostly to greater than expected internal tax
collection (income tax and VAT) and increased customs duties.
The Director General of Taxation attributes this performance
to stronger efforts from the Government of Haiti to fight tax
evasion and expand computerization of tax administration
offices in Port-au-Prince. End Summary.

Total Revenue Collection Increases
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2. Government revenue collection was approximately USD
501.75 million for fiscal year 2006, which exceeded
projections by ten percent. Customs revenue collection
accounted for about 80 percent of total revenue collected.
Statistics provided to post by the GoH General Directorate of
Taxation (DGI) show that fiscal revenue collection was USD
165 million. The DGI's actual revenue collection exceeded
its prediction of 143 million for the fiscal year by fifteen
percent. Tax collection branches in the provinces
contributed only three percent of total revenue for the year.
In the provinces, tax collection trailed government
projections for each of the twelve local tax collection
agencies. Only Fort-Liberte collected 98 percent of its
budget projection. The other eleven local offices lagged
largely behind the targets, with Jeremie and St. Marc
collection only 39 percent of their projected revenues.
Note: The Haitian fiscal year runs from October 1 to
September 30, and figures are converted into USD at the rate
of 39.86 gourdes to 1 USD. End Note.


3. Another major revenue component, customs collection,
exceeded projections by about 127 percent, with actual
revenue collected at about USD 245 million instead of the
projected 129.9 million. Compared to the previous fiscal
year, this represented an increase of 45 percent. Similar to
fiscal revenue collection, the Customs office in
Port-au-Prince (covering the airport and port) represented
about 90 percent of total customs receipts. Branches in the
provinces contributed less than ten percent. this is partly
due to the poor infrastructure in the regions covered by
those branches, which facilitates smuggling activities and
corruption. Customs collections were also affected by a
violent protest at the Malpasse Border point, which shut down
the Customs office there for about three months. The
majority of Haitian commerce with he Dominican Republic is
conducted by truck via Malpasse/Jimani.

Revenue Collection Projections Target for FY06-07
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4. In fiscal year 2007, DGI officials expect to collect
about USD 183.5 million, about 27 percent more than the prior
year. The government predicts that most of this revenue will
come from income tax and VAT, which will account respectively
for USD 79.83 million and USD 38.4 million. DGI intends to
implement several projects over the fiscal year to boost tax
collection in the provinces, including extending
computerization of tax administration to local branch offices
and interconnecting them via satellite to the central office.
Aside from increasing fees for motor vehicle plates and for
driver license issuance, DGI also plans to implement a
program to track and register tax payers in an effort to
create a larger fiscal registry system and broaden the tax
base.


5. Comment: Local tax and customs agencies will have to
increase revenue collection significantly to meet IMF
collection targets for this year (about fifteen percent of
GDP). If the GoH fails to meet the collection target, it
will likely delay implementation of the GoH's Social
Appeasement program (PAS) and investment in infrastructure
projects. End Comment.
SANDERSON