Government revenue collections from taxes for January stood at $11.9 billion, representing a 39.9% increase from the same period last year, according to the February Monthly Economic Bulletin published by the Ministry of Finance.
The bulletin notes that central government’s current revenues totalled $12.4 billion in January, 2017, representing an increase of 42.3% compared with revenue in January, 2016. The growth was primarily fueled by an expansion in tax revenues due to higher arrears collection and greater compliance, especially among the self-employed.
Specifically tax revenue collections increased to $11.9 billion (with Value-Added Tax (VAT) contributing $3.7 billion of this revenue) compared with the $8.5 billion collected in January, 2016.
The bulletin credits the increase to greater earnings from company, withholding, excise, international trade and personal income taxes, which rose by exponentially.
The 236.3% expansion in company taxes was attributed towards significant arrears payment made by several companies along with late advance payments by companies for revenues related to 2016.
“On the other hand, the higher revenues for withholding taxes were attributed to a significant payment made in January, 2017 on remittances sent overseas,” it notes, while adding that an increase in the number of self-employed persons making payments in January, 2017, combined with arrears payments led to growth in personal income taxes, and that trade taxes increased as a result of growth in the value of goods imported.
The bulletin says that excise tax collections also showed a substantial growth of 82.2%, reaching $2.3 billion in January, 2017, compared with $1.3 billion in January, 2016. This increase was reportedly driven by greater revenues from petroleum products, while a 12.3% increase was recorded in VAT collection.
Government has attributed the increase in VAT collection to a growth in the value of imports.
Meanwhile, non-tax revenues amounted to $487.5 million in January, 2017, more than double the $201.5 million earned in January, 2016, due to continued growth in the collections of rents and royalties.
Gov’t spending almost doubled
During that same period, central government spent $15 billion. This is almost double the $7.7 billion spent in January, 2016. The increased expenditure is credited to growth in non-interest and capital expenditure, due to the early passage of budget 2017.
While expenditure in January, 2016 “was subdued as agencies were only allowed to spend up to a twelfth (1/12) of their current budget,” in January, 2017 agencies were able to spend their entire current budget allocations.
Specifically non-interest expenditure amounted to $12.6 billion in January, 2017, compared with $7.2 billion in January, 2016. Every major category in this area of expenditure recorded growth, including employment costs, other goods and services and transfers.
Employment costs were $3.9 billion, which was $585.8 million more than for the same period in 2016. The increase resulted from costs associated with new recruits as well as the annualization of 2016’s salary increases.
Meanwhile, $1.5 billion was spent under other goods and services, which is an increase of $845.6 million or 129.3% over January, 2016.
“This expansion was attributed to the early passage of Budget 2017 which facilitated an early commencement of the work programme in subcategories such as maintenance, purchase of materials and supplies and also early payment for utility services,” the bulletin explains.
It further notes that $7.2 billion was spent on transfer payments for January, 2017, representing an increase of $4 billion to January, 2016. This was mainly attributed to a $3 billion subsidy given to GuySuCo to cater for operational expenses.
Finally, capital expenditure was recorded at $903.8 million for January, 2017, compared with zero in January, 2016.
These monies were expended on the multi-year projects for hinterland roads in regions 1, 2 and 7; urban roads and drainage in areas such as Sophia, Plaisance, Kitty, Amelia’s Ward and Richmond Hill, as well as roads in regions 4 and 5; the West Demerara Highway and other community enhancement initiatives under the Project Development and Assistance Programme. Outstanding payments were also made to contractors for works done on the D’Urban Park development under this category of expenditure.