Total tax revenues during 2006 amounted to Lm734.2 million (EUR1,710.2 million), with a tax burden of 34.0 per cent, according to National Statistics Office figures released yesterday.

Total tax revenue during 2006 increased by Lm45.0 million or 6.5 per cent over the previous year, and amounted to Lm734.2 million. Tax revenue may be broadly classified under three headings: indirect taxes, direct taxes and social security contributions.

Indirect taxes, at Lm335.0 million, make up 45.6 per cent of total tax revenues. Indirect taxes are defined as taxes linked to production and imports. This tax category includes VAT, import duties, excises and other specific taxes on services, and on financial and capital transactions. Within this heading VAT is the most important component, followed by taxes on products (including excise duties). During the course of 2006, revenue from excise duties (mainly on cigarettes and petroleum) totaled Lm62.2 million, while VAT revenues amounted to Lm175.4 million.

During 2006, direct taxes made up 35.9 per cent of total tax revenue, one percentage point higher compared to the previous year. An increase of Lm30.7 million in income taxes was in part offset by a reduction of Lm5.9 million in 'other current taxes'. This decline was due to receipts under the 'investment registration scheme' applicable in

2005, but which were not repeated last year. While actual cash receipts of social contributions recorded a year-on-year increase, when adjusted for accruals, this category of tax declined by Lm4.5 million during 2006.

The overall tax burden, defined as the total amount of taxes and actual social contributions expressed as a percentage of GDP, edged up to 34.0 per cent in 2006, from 33.9 per cent one year earlier.