NASSAU, BAHAMAS — The government spent nearly $353 million over the past two fiscal years on COVID-19-related expenses, according to data released by the Ministry of Finance.
The 2020/2021 fourth quarter fiscal snapshot noted that during the period, the government continued its COVID-19-related health containment, mitigation and support programs for impacted families and businesses.
“These outlays are estimated at $273.3 million and, together with the $79.5 million expended in FY2019/20, brings the aggregate spend to approximately $352.7 million,” the report noted.
These expenses included public health and safety, unemployment assistance, the acquisition of goods and services, the government’s job retention program and food assistance.
The report also noted that preliminary data from the central government’s operations for fiscal year 2020-2021 indicate a widening of the fiscal deficit to $1.35 billion from $811.7 million in the previous year, consistent with projections.
“This outcome is largely due to the economic impact of the COVID-19 pandemic and related expanded social welfare initiatives,” the report noted.
“This outcome is largely due to the economic impact of the COVID-19 pandemic curtailing revenue receipts and related policy measures increasing expenditure to support various social assistance and employment support programs in response to the same.”
It also noted that revenue collection for fiscal year 2020/2021 totaled $1.9 billion, surpassing the budgeted amount of $1.8 billion by 6.2 percent ($110.1 million).
“However, year over year, it represented a decline of 10.8 percent ($226.5 million),” the report noted.
“During the latter half of the fiscal year, revenue collections firmed as economic activity improved as a result of the resumption of taxable activities, global vaccine rollouts and an the attendant uptick in tourist arrivals.”
The report noted, however, that during the second half of fiscal year 2020/21, government tax revenue collections improved “in line with the easing of the COVID-19 restrictions on economic activity and the steady recovery of tourism”.
“Of the $1,603.3 million in tax receipts, 16.8 percent was amassed in the first quarter; 18.7 percent in the second quarter; 29 percent in the third quarter; and 35.5 percent in the fourth quarter,” the report noted.
“Approximately $1,033.5 million (64.5 percent) was collected during the second half of the fiscal year.
“Quarterly VAT receipts strengthened progressively during the year, with the strongest gain of $271.8 million posted in the final quarter.”
The report also noted that taxes on property improved by an estimated $44.4 million to $143.5 million, and represented 136.9 percent of budget.
It was noted that this outcome included an additional $27.6 million in collections from the government’s real property tax forgiveness program to reduce outstanding arrears.
As a result of the government’s net borrowing activities, the direct charge on the government — exclusive of exchange rate adjustments — increased by $1.7 billion to $9.9 billion or 86.3 percent of GDP at end-June 2021, as compared to 66 percent of GDP at the end of June 2020.
The government closed the year with a budget deficit of $1.3 billion, inclusive of $273.3 million in COVID-19-related expenditures and $68 million approved in June by Parliament to build a major multi-story extension to Princess Margaret Hospital.
According to the Ministry of Finance, unemployment support and social welfare programs accounted for the largest portion of the government’s COVID-19 expenditure: $164.7 million and $40.4 million on food assistance respectively.
The government’s job retention program accounted for $23 million in expenditure last year, along with $4.1 million on small business development and $36.6 million on public health and safety.
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