Tax Revenue $6.6 Billion Above Budget

The Economic Programme Oversight Committee (EPOC) is reporting that the Government’s tax revenue intake for the first nine months of the 2015/16 fiscal year ending December totalled $291.7 billion, which is $6.6 billion above budget.

EPOC Co-Chair, Richard Byles, said the figure is $33 billion ahead of the intake for the corresponding period in 2014/15.

He was addressing journalists at EPOC’s monthly media briefing at Sagicor Life Jamaica Limited’s head office in New Kingston on Tuesday, February 23.

Overall revenue inflows for 2015/16 are $2.5 billion or 0.8 per cent ahead of budget, and significantly above the figure for corresponding period in 2014/15, at $31.5 billion or 11 per cent.

The Government’s revenue budget this year, which is higher than the International Monetary Fund’s (IMF) target under the Extended Fund Facility (EFF), takes into account the 0.25 per cent reduction in the primary balance. Overall expenditure is $3.5 billion below budget.

Mr. Byles said the tax categories contributing to the “favourable” revenue inflow include: tax on interest, which was $4.5 billion over budget; Special Consumption Tax (SCT), $2.4 billion ahead of target; company tax, up $1.7 billion; and General Consumption Tax (GCT), $1.5 billion.

He indicated that the main categories underperforming were: telephone call tax and customs duty, which were each $900 million below budget; and tax on dividends, which fell $600 million short of target.

Additionally, Mr. Byles said revenue from grant inflows remain “way below’ target, lagging $3.2 billion behind budget at the end of December 2015.

In relation to expenditures, Mr. Byles told journalists that recurrent expenditure accounted for $3.2 billion of the $3.5 billion under spend.

Among the contributing factors, he informed, was the pending payment of $5 billion in interest on bonds.

He noted that the payment of public sector salaries for the period, resulting from settlements on the 2015/17 wage agreement, were $2.3 billion higher than budgeted.

Regarding capital expenditure, Mr. Byles indicated that this has “finally almost caught up with the budget,” consequent on the IMF’s reduction in the primary surplus from 7.5 per cent to 7.25 per cent.

He contended that the economy should benefit from the primary surplus reduction which “has opened up some room for capital expenditure.”