2018/19 Budget Communication 2018_2019 BUDGET COMMUNICATION | Page 34

importance.
Indeed it is estimated that services account for
fully 78 per cent of Gross Domestic Product.
This
distortionary situation was rectified to some extent with the
introduction of the broad-based VAT in 2015 but it is still
the case that Customs and Excise duties account for upwards
of 30 per cent of total Recurrent Revenue.
With planned accession to the World Trade
Organization, there will be a requirement to implement
significant reductions in Customs duties in this country in
return for membership in a group that will secure access to
foreign markets and the protections afforded by a structured,
rules-based system of trade, which is vitally important to a
small trading nation such as ours.
But outside of the WTO requirements, it is the view
of the Government that adjusting the relative burden of
taxation from goods and toward a more equitable balance of
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