Prime Minister touts improvements in the country’s financial health
NASSAU, BAHAMAS — Government revenue for the first nine months of fiscal year 2022/2023 amounted to $2.1 billion, representing a 14.5 percent increase compared to the previous year and nearly 74 percent of the budget forecast.
Total expenditure increased by $145.3 million to a total of $2.3 billion during the first nine months of the fiscal year accounting for 67.8 percent of the budget target. Prime Minister Davis also tabled a resolution to approve the proceeds of borrowing some $45.2 million.
Prime Minister Davis during his 2023/2024 Budget Communication highlighted this positive growth, stating that total revenue has significantly improved compared to the performance in the pre-pandemic fiscal year 2018/2019, when only 63.7 percent of the budget forecast was achieved in the same period.
Several tax categories contributed to the revenue increase; property taxes grew by $24.3 million to reach $130.7 million, representing 77.1 percent of the budget target.
VAT receipts showed significant improvement, increasing by $112.4 million to reach $947.5 million, which accounted for 67.1 percent of the budget target.
Stamp taxes on financial transactions and VAT on real estate transactions also surpassed the budget forecast by 16.3 percent, totaling $80.5 million.
Gaming taxes experienced growth of $11.8 million, totalling $49.2 million, and representing 93.4 percent of the budget forecast at the nine-month mark.
Licenses for special business activities, including specific business licenses and communication levies, increased by $8.1 million to reach $89.1 million, representing 68.2 percent of the budget forecast to date.
Taxes on international trade and transactions increased by $151.4 million to $498 million, making up 80.8 percent of the budget forecast, primarily driven by increased departure tax collections and excise duties.
On the expenditure side, total expenditure increased by $145.3 million to $2.3 billion, accounting for 67.8 percent of the budget target. Recurrent expenditure saw a rise of $111.6 million, reaching $2.1 billion, which accounted for 69.4 percent of the budget forecast.
Spending on employee compensation increased by $55.7 million, totaling $594.0 million, representing 71.7 percent of the budget target.
Prime Minister Davis highlighted positive labor policy changes for public sector workers, including an increase in the minimum wage rate and signed industrial agreements.
Public debt interest payments reached $391.8 million, accounting for 70 percent of the budget forecast.
Payments on foreign currency obligations totalled $197.2 million (50.3 percent), while payments on domestic debt obligations reached $194.6 million (49.7 percent).
Government subsidies narrowed to $330.4 million, equaling 76.4 percent of the budget forecast. COVID-19-related recurrent expenditure measures totaled $6.2 million, showing a significant decrease of 94.4 percent compared to the previous year.
In terms of capital expenditure, spending increased by $33.7 million to $193.9 million, representing 54 percent of the budget forecast for the first three quarters.
Compared to the previous year, the deficit decreased by $120.1 million, reaching $336.3 million, accounting for 2.7 percent of nominal GDP. The primary balance showed a surplus of $175.6 million at the end of March 2023, a substantial improvement from the previous year’s primary deficit of $2.4 million. This surplus exceeded the targeted amount set in the Draft Estimates of Revenue and Expenditure, as well as the projected deficit in the 2022 Fiscal Strategy Report.
The government’s net debt increased by $290.8 million, totaling $11.1 billion, primarily due to net borrowing activities. Domestic currency debt accounted for $5.9 billion (53.4 percent of total central government debt), while foreign currency debt accounted for $5.2 billion or 46.6 percent of total central Government debt.
Recurrent revenue is projected to be $3.316 billion, recurrent expenditure is projected to be $3.085 billion, and the recurrent surplus is projected at $230.7 million. For the current year, the government is projecting a recurrent deficit of $164.3 million, reflecting a $395 million change.