The government has been paying out a steadily increasing amount of money on things like salaries, but has been collecting less in revenue.
During his budget speech in the House of Assembly on Monday (January 16), Premier and Minister of Finance Dr D Orlando Smith disclosed the challenges in balancing the books.
He gave statistics showing annual decreases in revenue collection up to last year.
“With regard to our fiscal performance, we collected $317.6 million revenue in 2015, which was a mere 0.3 percent less than 2014 revenue.”
“Estimated revenue projections for 2016 is $310,470,000 which represents 6.2 percent decrease in actual revenue collected under the budgeted amount of $330,846,500,” the premier said.
He blamed the shortfall last year on his government’s delay in implementing some revenue measures.
“The reason for this was mostly attributable to our delays in implementing our revenue raising initiatives in 2016. The majority of our total revenue falls in the category of receipts for goods and services. In 2015, these accounted for 61.9 percent of total revenue with the lion share (92 percent) of that revenue being fees from financial services. Receipts from financial services to central government stood at $175 million in 2015, and we expect it to be slightly less than this, at approximately $170 million in 2016.”
“Property taxes, taxes on imports and payroll tax all registered increases of 20.7 percent, 7.5 percent, and 4.3 percent respectively in 2015. These increases were attributable to a period of amnesty given for the payment of property taxes and payroll tax,” the premier further said.
He continued: “In 2016, our current estimates illustrate that property taxes experienced a decrease of about 12.2 percent while payroll taxes and taxes on imports registered increases of 1.3 percent and close to 1 percent respectively. These changes were higher than the 2014 levels on property taxes, payroll taxes, and import duties.”
Premier Smith then tried to explain his government’s recurrent expenditure, which comprises payments made for all purposes except capital costs.
“Recurrent expenditure has been steadily increasing, driven largely by increased compensation to public officers, transfers and subsidies to statutory organizations – with a noticeable increase of some 10.2 percent in 2015 from 2014. Making up the increase in recurrent expenditure was a 6.2 percent increase in employee compensation and a 17.9 percent increase in the cost of goods and services.”
“Current estimates project a 3.6 percent increase in recurrent expenditure in 2016 at $288,640,000. I am happy, Madame Speaker, that this expenditure included increments for public servants, though I am advised by the HR Department that these monies will take a few months to be disbursed,” added Premier Smith.
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