PHILIPSBURG–There is no need to panic about the shortfall in government revenue in the first quarter of this year, said Finance Minister Richard Gibson, as revenue has been boosted in the first two months of the current quarter.
“At this point in time, although we have some serious decline in economic activities, from a budget point of view there is no reason to panic, and I have good reason to believe that at the end of the road we will be meeting the revenues projected in the budget,” said Gibson on Wednesday. Once the projections are met, no budget deficit is expected for 2016.
Gibson said the shortfall of some NAf. 14 million for the first quarter as announced by Committee for Financial Supervision CFT, was based on Government’s own report submitted to the Committee for review.
The second quarter is showing “a substantial increase” in revenue compared to the same quarter last year. “Apparently, the shortfall for the first three months of this year has some kind of delay … that we have not put our finger on as yet,” said Gibson.
Meanwhile, Government’s projected expenditures have been NAf. 7 million less than was projected so far.
Here are some “problems” with the financial picture of the country, said the Minister. A “strange phenomenon” has shown up in that the government income from Turnover Tax (ToT) has reduced considerably, while wage tax earnings have “increased considerably.
“Those two things don’t go hand in hand. There are two opposing directions … if you have less income [based on ToT receipts -Ed], you are not going to go and hire more people. But, if you have more wage taxes being collected, it means more people are being hired. We need to have a long period to be able to analyse all of these numbers,” Gibson said.
Source: Daily Herald
Gibson: Substantial increase in revenue in second quarter