The Tribune

By LEANDRA ROLLE

Tribune Staff Reporter

lrolle@tribunemedia.net

PRIME Minister Phillip “Brave” Davis said for the first six months of the year, revenue collections are estimated at $1.2bn, which represents a $111.5m increase over the same period in the previous fiscal year.

 “To date, revenue collections account for 44.5 percent of the annual budget target. This alone is indicative of the positive impact of the reforms implemented by this administration,” he said during his mid-budget year communication in Parliament yesterday.

“When we examine the first six months of (fiscal year) 2021/22, 43.4 percent of total revenue was collected during this period and only 35.3 percent of revenue was collected in the first half of (fiscal year) 2020/21.

 “Further, when we look at the last ‘normal’ fiscal year of 2018/19, only 41.7 percent of revenue was collected during the first six months.”

 He said the policy shift was just one of his administration’s prudent strategies to restore the country’s fiscal health and said by improving revenue collection earlier in the fiscal year, we “improve the cash flow.”

 This also reduces the need for short-term borrowings, he added.

 Prime Minister Davis also gave a further breakdown of revenue receipts, which showed improvements in tax revenue collections as well as in other areas.

 “Tax revenue collections improved by $123.8m and stood at $1.1bn for the first six months of the fiscal year. This represents 44.0 percent of the budget target,” he added.

 He also noted that VAT, which accounts for 54.8 percent of tax revenues, totaled $600.2m and grew by $23.7m when compared to the same period the previous year.

 He added that departure tax collections and stamp tax collections also saw improvements.

 “Value added tax, which accounts for 54.8 percent of tax revenues, totaled $600.2m and grew by $23.7m, relative to the same period in the previous year. This equates to 42.5 percent of the annual budget target.

 “With the sustained improvement in the tourism sector, departure tax collections totaled $71.5m and improved by $45.0m relative to the previous year. At the half-year mark, departure tax accounts for 73.7 percent of the budget target.”

 As for total expenditure, he estimated it at $1.5bn for the first six months of the year, which represents an increase of $119.3m over the previous year.

 He added: “As for recurrent expenditure, preliminary estimates indicate an increase of $105.3m to $1.4bn, with key spending components, including an increase in compensation of employees by $42.2m, to $399.4m, and representing 47.2 percent of the budget target increased spending in this component is explained by higher employment costs because of promotions, and other staff and salary adjustments during the period.”

 Mr Davis also said that public debt interest payments increased by $41.1m to $280.9m and equated to 50.2 percent of the budget.

 Spending on the use of goods and services also increased by $24.1m to $274.5m, according to the prime minister yesterday.

“In line with the government’s core functions in society, key expenditure during the period included: increased spending on education, as outlined in the (fiscal year) 2022/23 budget’s plans to invest in education and training,” he continued.

 “For instance, during the period, transfers for scholarships and grants increased by $2m and totaled $20.1m. Subsidies to the University of The Bahamas increased by $1.1m and totaled $15.5m.

 “Because of the public’s reduced reliance on COVID-19 support, social assistance benefits receded by $36.9m, and subsidies tightened by $5.6m, particularly for the Public Hospital Authority.

“In fact, direct COVID-related spending during the period significantly eased to $4.7m, a contraction of $39.5m relative to the same period in the previous year. I note, however, that social assistance spending still represents a substantial increase over that of pre-pandemic years, in recognition of the enduring impact of the lockdowns on household income.”

He also revealed that the government experienced a net deficit of $285.7m, which represented an increase of $7.8m compared to the previous period.