•  Will have negative impact on govt’s ability to meet fiscal deficit target

The difference between the amount of revenues the government expected to collect and the amount it actually collected zipped to $29.0 billion during the period April to January of this fiscal year, despite the imposition of a massive $22.0 billion tax package on January 1.

This represented an increase in the revenue shortfall of $4.0 billion when compared to the $22.0 billion shortfall recorded during the period April to December of this fiscal year,

Total revenues and grants budgeted was $258.4 billion, but only $229.3 billion flowed into the government’s coffers, as consumers and businesses continue to reel from the 9 consecutive quarters of decline in real gross domestic product (GDP) and the transfer of almost $32.0 billion under the debt exchange programme.

Tax revenues were running at $5.7 billion below the $233.6 billion programmed, $5.0 billion above the shortfall of $22.0 billion recorded during the period April to January of this fiscal year. The total amount collected from beleaguered taxpayers during the period under review was $205.8 billion, below the $233.6 billion projected by Finance Minister Audley Shaw and his technical team.

The bulk of the shortfall was recorded under the category international trade taxes, which include custom duty, the application of the General Consumption Tax (GCT) and the Special Consumption Tax (SCT) to imports, the travel tax, as well as stamp duty.

Revenue collections from these items were running at $12.6 billion or 17.2 per cent below the 73.0 billion projected for by the minister and his team during the review period. GCT on imports was cantering at $6.6 billion less than anticipated and the SCT was lagging at $2.3 billion behind.

Meanwhile, data made available by the Ministry of Finance and the public service indicated that production and consumption taxes such as GCT and SCT local, education tax, motor vehicle licences and the betting, gaming and lotteries tax were crawling at $9.8 billion or 14.7 per cent below the budgeted amount which $66.8 billion.

Income and profits tax, which include corporate and PAYE taxes were creeping at $86.5 billion, $5.6 billion or 6.0 per cent less than the $92.0 billion budgeted for by the minister, while capital revenues were 46.4 per cent less than expected. Only $1.1 billion of the $2.1 billion expected flowed into the government’s coffers during the review period.

These revenue shortfalls will have a negative impact on the government’s ability to meet revised fiscal deficit target of 8.7 per cent of GDP or even the revised one of 10.0 per cent of GDP under the agreement with the International Monetary Fund (IMF). This could prevent the country from drawing down any more money from the fund and the other multilateral agencies unless the government cuts back on the provision of basic social services or sends home thousands of public servants.­