Prime Minister, Hon. Dr. Ralph Gonsalves, outlined the 2017 fiscal performance of the Government at a press conference on Tuesday, 2nd January, as a precursor to the budgetary estimates scheduled for Monday, 29th January.
At the end of November 2017, Dr. Gonsalves disclosed that total revenue and grants amounted to $554.2 million or 6.1% more than 2016. Current revenue was $523.4 million or 4.1% more than 2016, while total expenditure as of the end of November 2017 was $583.3 million or 9.6% above the number for the same period in 2016.
The former Minister of Finance opined that current expenditure was $522.3 million or 8.6%, while capital expenditure amounted to $61 million or 19% more than the comparable period, 2016. Current balance or current account surplus, was just over $1.078 million, compared to $21 million for the same period, 2016; and the overall deficit was $29 million, comparable to $10.3 million 2016.
Dr. Gonsalves explained that more revenue and grants were collected in 2017 than in 2016, but the Government spent much more money in 2017 than in the previous year. He said there has been a significant increase in current account expenditure, where the fastest growing items were pensions and retirement benefits.
Dr. Gonsalves described pensions and retirement benefits as “just growing” and that it is an area which “we have to do some reforms”. He added that in 2015, this figure was $55.5 million at the end of November 2017; it has increased by $10 million.
Pertaining to tax arrears, Dr. Gonsalves emphasised that the Government has to address this matter very seriously. It is not only tax arrears, but outstanding interests and penalties, he stated. Accordingly, as of December 29th 2017, Dr. Gonsalves disclosed that the Central Government is owed in aggregate $301.8 million, of which $177.4 million is the base tax owed. $26.88 million is owed for penalties and $97.5 million in interest. Dr. Gonsalves further stated that some commercial entities are withholding taxes collected on the Value Added Tax (VAT), and employees PAYE.
Outstanding taxes included: VAT $33.4 million with interest accrued up to $22.8 million; personal income tax $23 million; and PAYE $24 million. Prime Minister Gonsalves remarked that the “the Government is tackling vigorously” this issue, and that he expected the Minister of Finance to outline measures in his budget speech to correct same.