KINGSTOWN, St. Vincent – The St. Vincent and the Grenadines government says it has collected EC$70 million in tax revenue during the first eight months of the year, compared to the same period of 2024.
Finance Minister Camillo Gonsalves (File Photo)But it acknowledged that spending outstripped receipts slightly, leaving a current account deficit of EC$718,000, down from EC$19.3 million last year.
Finance Minister Camillo Gonsalves told Parliament that the current revenue of the Ralph Gonsalves’ government’s fiscal performance during the first eight months of the year amounted to EC$583 million, compared to EC$517 million up to that same period last year.
“So we’re almost EC$70 million up — 60-odd million, and at 2023 at this period, we were at EC$481 million. So current revenue is up over EC$100 million over 2023,” he said, adding that total revenue and grants was EC$624 million compared to EC$559 million year to point in 2024, and EC$514 million in 2023.
“So that’s up $110 million over the two-year-ago period,” he said.
The EC$70 million in taxes collected through August 31 is an 11 percent increase over the EC$62 million of the year-ago period. Corporate taxes stood at EC$40 million, a 22 percent increase over the 2024 period, when it was EC$33 million.
“That always suggests that businesses are doing a little more business, making a little more money, and that’s good for everybody,” Gonsalves said, adding that taxes on goods and services generated EC$182 million as opposed to EC$175 million in 2024 and EC$167 million in 2023.
Taxes on international trade was at EC$159 million, compared to EC$132 million in 2024 and EC$115 million in 2023. The sale of goods and services generated EC$75.4 million as opposed to EC$61 million last year and EC$51 million in 2023.
Capital revenue and grants was flat year-on-year at EC$41 million this year, compared to EC$32 million in 2023.
Gonsalves said total expenditure was EC$841 million on August 31, as compared to EC$728, year-on-year and EC$601 million in 2023, adding “you will notice that although the current revenue is increasing dramatically, so, too, is the expenditure”.
The finance minister said current expenditure stood at EC$584 million at the end of August, while it was 536 million in 2024 and EC$484 million in 2023.
“You’re seeing the trend that if you go back two years, everything is up in the neighborhood of $100 million, going back from the 2023 period to now.”
Gonsalves said one of the “big-ticket items” is the compensation of employees, which was EC$262 million, up from EC$244 million in 2024 and $232 million in 2023.
He said the salary increase that came into effect this year contributed to the higher spending.
On the capital side, capital expenditure was EC$257 million.
He noted that in 2024, the government set a record of EC$568 million in capital spending, even as the number was EC$191 million on August 31, 2024.
“So we are far outstripping last year’s record pace,” Gonsalves said, adding that capital spending was up 34 percent.
“The current balance is $700,000 in deficit as opposed to last year, when we were $19 million in deficit. And the primary balance is a deficit of 130 as opposed to a deficit of 97 last year,” he said.
The finance minister said the current expenditure of EC$584 million was almost the same as the current revenue, hence the deficit was less than EC$1 million. As of August, 31, the government recorded revenue totaling 1.05 billion, including current revenue and capital receipts.
“This represents 57 percent of the amount budgeted to be collected for the year on the expenditure side,” Gonsalves said, noting that current expenditure, amortization, sinking fund contributions and capital expenditure added up to approximately one billion EC dollars or 54 percent of the budget.
“The total budget would be broken down as follows: current revenue, of EC$583 million; capital receipts of EC$471 million, of which grants are 36 million, external loans are 292 million, local loans of 107 million, disposal of land of 1 million, and other receipts of 35 million …”
He said expenditure was EC$584 million, made up of financing of EC$158 million, amortization of EC$146 million, sinking fund contributions of EC$11 million and capital expenditure of EC$257 million.
Gonsalves said that with two-thirds of the year having passed, current revenue has performed well, increasing significantly by 12.8 percent and so far accounting for just over 64 percent of the budget.
“We’ve had good performance from taxes on income and profits, which increased by 13 percent because all subcomponents performed better than last year, especially corporate taxes, which outperformed their respective year-to-date budget targets.”
Similarly, taxes on international trade went up by 21 percent and the sub-components of import duty, vehicle surtax and VAT also outperformed the previous year and the year-to-date budgets.
Revenue from sales of goods and services went up by 24.5 percent, driven by increased collections on driver’s licenses, which also outperformed their target to date. Recurrent expenditure saw an 8.9 percent increase in spending, approximately 64% of the budget to date.
“This is driven by increased expenditure on the compensation of employees, which went up by 7.1 percent due to the 2.5 percent salary increase for public servants, along with increases in increments and allowances and also some new hirings.”
Gonsalves said the one percent increase in the National Insurance Services contribution rate also contributed to part of this 7.1 percent increase in compensation.
