NASSAU, BAHAMAS — Prime Minister Philip Davis yesterday gave notice to Parliament that the government intends to borrow some $700 million for the 2022/2023 fiscal year, as the government is forecasting a revenue intake of $2.8 billion and a total expenditure of $3.3 billion.
Following his presentation of 2022/2023 fiscal budget Prime Minister Davis gave notice that the government plans to borrow $439,282,887 and $251,419,140 to finance the deficiency of revenue over expenditure for the 2022/2023 fiscal year.
During his budget presentation, Davis also said that the government will be seeking Parliamentary approval for a Supplementary Budget for the additional recurrent expenditure of $216,928,017 and a capital expenditure of $34,491,123. He noted that his administration still has a number of inherited arrears that it believes must be liquidated.
Davis said that total revenue is projected at $2.8 billion, a 19.9 percent increase over the prior fiscal year when the economy was in the early stages of an economic rebound from the COVID19 pandemic. He further noted that in the budget for the fiscal year 2022/23, VAT collections are estimated at $1.4 billion, a 52.4 percent increase over the prior year’s budget.
“The increase is largely attributed to a rebound in economic activity, the economic stimulus associated with the reduction in VAT from 12 percent to 10 percent, as well as the positive benefits of the removal of the COVID-19 Emergency Orders. Real property tax revenue is also forecast to improve by 6.7 percent to $169.4 million but remains below the more than $280 million in real property tax invoices issued annually. Enhancements in revenue administration are critical in further improving collections in this area,” said Davis.
He noted that total expenditure is forecast at $3.3 billion, with recurrent expenditure projected at $2.9 billion million, and capital expenditure estimated at $371.1 million.
“As a result of these operations which incorporate prudent fiscal management principles, the fiscal deficit under the current budget is estimated at $564.3 million or 4.3 percent of GDP,” said Davis.
The Ministry of Finance reported that during the first nine months of FY2021/22, total revenue increased by $617.6 million or 50.2 percent to $1.8 billion million, as compared to the previous year.
Key developments underlying the revenue performance were an increase in property taxes by an estimated $9.8 million to $96.6 million; an increase in receipts to $836.1 million over the nine-month period; and an improvement in gaming taxes by $21 million to total $37.5 million.
During the nine-month period of the FY2021/2022, outlays for recurrent expenditure expanded by $80.7 million or 4.2 percent to just over $2 billion compared to the same period in the prior year – representing 70.2 percent of the targeted spend.
