Fiscal Balance Remains Strong

The country’s fiscal balance remains in good standing, with the deficit at $7.8 billion at the end of the 2014/15 financial year in March.

The figure is $3.6 billion better than the target of $11.4 billion, and can be credited to the lower interest payments on Government of Jamaica (GOJ) bonds, and cuts in expenditure for the period.

“What this means is that the Government has to borrow less in order to meet all its expenditures including the payment of interest, and so that is good, because it reduces (the) debt build-up,” said Co-Chair of the Economic Programme Oversight Committee (EPOC), Richard Byles.

He was speaking at EPOC’s monthly press briefing in Kingston on Tuesday (May 5), where an assessment of the country’s economic performance as at the end of March was provided.

Mr. Byles also informed that the country “comfortably” met the Net International Reserves (NIR) target, which stands at US$2.3 billion, which is almost double the target of US$1.4 billion. “So, we passed that target very comfortably I would say,” he noted.

Meanwhile, the Government collected 98 per cent of its budgeted tax revenue for March. The EPOC Co-Chair said a total of $52.2 billion of the targeted $53.3 billion in taxes was collected.

The shortfall in tax revenues was a result of underperformance from company taxes and General Consumption Tax (GCT) on local purchases.

Mr. Byles told journalists non-compliance remains a serious issue in the collection of taxes. “Non-compliance continues to be a challenge for us, and we probably have not met the target we set because of compliance,” he noted.

“We have to get tougher in respect of tax compliance. We can’t be going down to the wire, every quarter and just barely meeting the tax targets or missing the tax targets and having to recover by cutting on the expenditure side; it can’t continue,” he noted further.