No Tax Budget Presented by Finance Minister

Finance and Planning Minister, Dr. The Hon. Omar Davies, today presented a no tax budget, and stressed that the government intended to exercise fiscal restraints while implementing stringent revenue collection measures to raise the funds needed to finance the $328 billion budget.
Opening the 2004/05 Budget Debate in Gordon House, the Minister said that government intended to borrow $153 billion, with $122 billion to come from the domestic market and $32 billion from overseas financing.
A total of $4.3 billion in grants is expected, the bulk of which will come from the European Union, while capital revenue of $2.5 billion is projected, which is significantly less than the outturn for the last fiscal year, when there were significant inflows due to investment.
The government also expects to raise $155 billion in tax revenue, which represents an increase of 17 per cent over the outturn of $131 billion for 2003/04. In addition, non tax revenue of $10.2 billion is projected, of which a significant portion will come from the two per cent Custom User Fee, which realized revenue of $4 billion during 2003/04. An additional US$6 million is expected from the sale of a cellular licence earlier this year to AT&T.
Dr. Davies said that in looking at ways to finance the budget this year, several factors had to be taken into consideration, the first of which was to contain inflation, while not placing additional burden on public sector workers who have committed to “hold strain” for two years as their contribution to addressing the fiscal problem.
As such, he said property taxes would remain at last year’s levels; the General Consumption Tax (GCT) on health insurance would be removed as of June 1 this year; and no GCT or duties on CARICOM manufactured solar water heaters.