The government would have to collect more than $1.6 billion in revenue from January through June this year to meet its revenue projection laid out in its 2018/2019 annual budget, according to data revealed in the “First Six Months Report on Budgetary Performance” compiled and released by the Ministry of Finance last night.
It’s significant ground to cover given that the Minnis administration collected just over $1 billion from July through the December 2018, the first six months of the 2018/2019 fiscal year.
The government has projected it will collect $2.6 billion in revenue for 2018/2019.
The deficit for the first six months of this fiscal year, though lower than at the same point last fiscal year, is, however, already over two thirds of the total forecast for the year.
The deficit shrank by 31 percent year on year.
As of December 2018, the deficit stood at $174.2 million compared to $253.9 million in the last period.
The GFS deficit for 2018/2019 is projected at $237 million.
The collection for the first six months is up 14 percent year on year.
The improved performance is largely due to the increase in value-added tax (VAT) and stamp tax, the government said.
VAT was raised by 60 percent, from 7.5 percent to 12 percent effective July 1, 2018.
The result is VAT collection is up, at $399 million, the data shows.
The government collected $318 million in VAT during the first six months of the previous fiscal year.
The government has projected that it will collect a little over $1 billion in VAT this fiscal year.
In a statement last night, the Ministry of Finance noted that “opening quarter VAT receipts were tempered due to the phased roll-out of the new rate in the hotel sector for bookings”.
Expenditure increased year over year from $1.134 billion in 2017/2018 to $1.184 billion this fiscal year.
The government said “higher growth in recurrent expenditure continued to reflect the settlement of budgeted arrears”.
Revenue from gaming taxes is at $9.8 million, below the year-earlier intake of $14.6 million.
“The ongoing delay in the implementation of the new schedule of taxes on gaming houses contributed to a $15 million shortfall in budgeted receipts, and placed receipts at only 14 percent of the $70 million anticipated annual yield,” the government said.
The ministry said the six-month budget report shows positive performance.
“We continue to work incredibly hard to achieve one of our core fiscal targets which is to reduce the deficit,” Minister of Finance Peter Turnquest said.
“So far, our year on year performance has been positive, and we expect to see that trend continue.
“As I said at the end of the first quarter, we must stay the course.
“We still need to do more work to increase the yield of the current tax base and we anticipate being able to do more when we have completed our internal capacity building.
“The current recruitment of tax auditors and compliance officials in our Department of Inland Revenue is a part of this capacity building exercise and we are excited that this talent will soon be on board.”
As for the increase in expenditure, Turnquest noted, “It remains important to point out to all Bahamians the tremendous burden that this administration – and by extension the Bahamian people – has to carry when it is forced to pay out $65 million in old bills over a six-month period.
“That said, the good news is that because we are now properly budgeting and managing our expenditure, we will get to a point when these old bills are paid off, and the resources be better utilized to the benefit of the Bahamian people.”
Education: College of The Bahamas, English