by Linda Straker
- Monthly revenue being more than what was collected per month in 2020
- Country is facing a deficit due to increased expenditure
- Government will be paying 4% interest on public servants’ salary from end August
Cabinet member Oliver Joseph who serves as Minister for Foreign Affairs, International Business and Caricom Affairs has disclosed that despite Government’s monthly revenue being more than what was collected per month in 2020, the country is facing a deficit due to increased expenditure.
“While the revenue situation is increasing, I can tell you that the expenditure is above the revenue. I can tell you that is not a good situation to be in because it means you are in a deficit and for the last five years, we were not in a deficit position but for the first time due to Covid and the impact on revenue, we are in a deficit position now,” Joseph said during the weekly post cabinet briefing on Tuesday 10th August 2021.
“So, the situation from January to June is that we have not returned to the 2019 period because we are using the base year as 2019, that is before Covid when the economy was performing well. Overall, we are still in a deficit, that is what the analysis is showing.” Joseph confirmed that members of the Cabinet received a status of the economy report during its weekly cabinet meeting on Monday, 9 August 2021. “And in addition to that we have to add EC$1.2 million to that wage bill for the public sector which will put us into a further deficit unless we have interest performance on the revenue collection side.”
Joseph serves as Head of the Government’s Negotiating Committee. He said that despite the shortage in revenue, the Government will be paying the 4% interest on public servants’ salary from the end of August. The collective agreement for the increase was signed in late 2018 when the economy was performing better, he explained.
A review of the Ministry of Finance Fiscal Reports for the months of April, May and June have shown that the Government earned more than the targeted revenue as projected in the 2021 Estimate of Revenue. All 3 months also surpass the amount earned for the same period in 2020.
The most revenue was earned through taxes on international transactions, with Customs and Excise collecting more than EC$80 million during those 3 months.
However, despite surpassing targets, the Government’s expenditure according to the monthly fiscal report for each of the three months was more than the targeted amount. In April, the total Current Expenditure, excluding principal repayments on debt, for the month of April was $51.5 million which was $0.4 million more than the $51.1 million targeted.
For the month of May 2021, total Current Expenditure, excluding principal repayments for the month of May was $65.6 million, which was $5.7 million more than the $59.9 million targeted and in the month of June total Current Expenditure, excluding principal repayments for the month of June was $50.8 million, which was $2.3 million more than the $48.5 million targeted.
Revenue for April 2021 was $57.8 million, which was $8.2 million more than the April 2021 target and $13.2 million more than the collections for April 2020. Revenue for May 2021 was $57.7 million which was $3.2 million more than the May 2021 target and $11.1 million more than the collections for May 2020. Current Revenue for June 2021 was $60.4 million, which was $7.2 million more than the June 2021 target and $8.4 million more than the collections for June 2020.