Government revenue grew by more than seven percent during the first quarter of the 2019/20 fiscal year, despite Hurricane Dorian wiping out two major economies in the country near the end of the quarter.
This growth was due in large part to higher value-added tax (VAT) collections during this period, which expanded by 7.6 percent, or $39 million, taking total revenue to $552.8 million for the first quarter, according to data in The Central Bank of The Bahamas’ Quarterly Economic Review for the third quarter of 2019, released yesterday.
“Tax receipts – which comprised 90.2 percent of total revenue — grew by $26.8 million (5.7 percent) to $498.6 million. Specifically, VAT collections — which represented 48.2 percent of total revenue — rose by $66.8 million (33.5 percent) to $266.2 million, as real estate transactions on which stamp taxes were previously applied, were now assessed VAT, partly offsetting proceeds from stamp taxes on financial and realty transactions, which fell to $10.6 million from $54.4 million in the previous year,” the CBOB report states.
“Meanwhile, revenue from excise taxes grew by $4.4 million (6.4 percent) to $72.9 million, while receipts from specific taxes — primarily gaming — firmed by $2.2 million (35.8 percent) to $8.4 million. With regard to the other components, taxes on the use of goods were higher by $6.4 million (47.7 percent), at $19.7 million, as timing-related factors increased income from business licensing fees more than two-fold to $11.1 million, while company taxes edged up by $0.1 million (4.8 percent) to $1.9 million. In contrast, motor vehicle taxes decreased by $0.4 million (5.4 percent) to $6.3 million and marine license fees declined by $0.1 million (31.9 percent) to $0.3 million.”
Departure taxes also grew by 33.5 percent, or $10 million, while export taxes more than doubled to $2.9 million from $1.4 million in the preceding year.
Non-tax revenue, which comprised 9.8 percent of total revenue, saw growth of 28.7 percent or $12.1 million due to the government’s receipt of an insurance payout from the Caribbean Catastrophic Risk Insurance Facility Segregated Portfolio Company (CCRIF SPC) following Hurricane Dorian.
“The latter boosted ‘miscellaneous’ revenue to $12.1 million from less than $1.0 million in the comparative period last year. More muted gains in receipts were recorded from the sale of goods & services, which grew by $0.9 million (2.3 percent) to $39.8 million, amid a rise in collections from immigration fees, while property income moved higher by $0.4 million (24.7 percent) to $2.0 million,” the QER report outlines.
“In contrast, proceeds from fines, penalties and forfeits decreased by $1.1 million (79.3 percent) to $0.3 million, largely reflecting declines in judicial fines and forfeitures. Further, receipts from reimbursements & repayments and sales of ‘other’ non-financial assets decreased to negligible levels.”
While there was growth across most areas, taxes on international trade contracted by $3.5 million, or 3.1 percent, to $110.3 million due to reductions in customs & other import duties, by $15 million, 18.2 percent, to $67.6 million.
Additionally, taxes on property declined by $3.7 million, or 30.4 percent, to $8.5 million and general stamp taxes fell by $1.9 million, or 47.9 percent, to $2.1 million.
Expenditure also grew in the first quarter, however by a modest 2.7 percent, or $15.6 million, to settle at $594.4 million during the review period.
This while the overall deficit shrunk by 36 percent, or $23.3 million, to $41.5 million during the first quarter.
This information is a reflection of the government’s finances before it implemented post-Hurricane Dorian policies and reconstruction initiatives, and prior to the government’s borrowing for rebuilding efforts.