The Government is reporting that the primary surplus out-turn for the 2016/17 fiscal year surpassed the target by $12.8 billion.
State Minister for Finance and the Public Service, Hon. Fayval Williams, says the figure stood at $135.9 billion, which was 0.7 per cent above the minimum seven per cent target for the period.
She was making her contribution to the 2017/18 Sectoral Debate in the House of Representatives on Tuesday, May 9, under the theme ‘Enabling Inclusive Economic Growth and Job Creation’.
The primary surplus is the budgetary allocation earmarked by the Administration for debt payments.
Mrs. Williams said last year’s out-turn was driven by stronger tax revenue inflows and expenditure containment.
“Of note, we got to the 7.7 per cent primary surplus, not by cutting capital expenditure. In fact, actual capital expenditure of $42 billion was approximately 22 per cent higher than the $32.7 billion for fiscal year 2015/16, and represented roughly 2.4 per cent of gross domestic product (GDP), versus 1.9 per cent the previous year,” she pointed out.
This, the State Minister further said, was an indication that “the economy is moving in the right direction”.
Additionally, Mrs. Williams said phased implementation of the revised personal income tax threshold, which saw the figure increasing from $592,800 to $1,000,272 in July 2016, was also pivotal in generating the revenues underpinning the impressive primary surplus out-turn.
“Tax revenues, overall, for fiscal year 2016/17 outperformed the budget by three per cent, the best in more than four years. Pay As You Earn (PAYE) personal income tax also outperformed the budget by five per cent, or $3.1 billion,” she indicated.
Phase two of the threshold, which further increased the figure to $1.5 million, was implemented on April 1, 2017.
This brought the total number of workers now exempt from paying personal income tax to 397,083, representing 84 per cent of 469,131 persons on the PAYE tax roll.
Mrs. Williams said that in addition to the better-than-budgeted PAYE out-turn, general consumption tax (GCT) improved by 7.5 per cent year-on-year, almost twice the growth rate of the nominal GDP.
More importantly, she added “GCT outperformed our budget by roughly two per cent.”
“It is clear that our ultimate goal that Jamaicans have more money in their pockets to spend in the local economy is being achieved,” Mrs. Williams said.