Jamaica's fiscal targets realign
Published:Friday | August 6, 2010 | 12:00 AM
A solid gain in collections of general consumption tax, at the ports and at cash registers, boosted tax revenues back into realignment at the close of the June quarter.
The first fiscal-quarter intake of taxes, rounded out at J$63.25 billion, after June's intake topped expectations by J$2.5 billion to completely erase the J$1.4 billion shortfall in the two months ending May.
The deficit was unchanged at J$10.4 billion in the past month, but that, in the context of the fiscal targets, was a plus for the finance ministry, which had expected to be reporting a deficit of J$16 billion in the first quarter.
The savings were both a function of overperforming revenues - taxes and grants combined - which ran J$2.7 billion above budgeted inflows to J$75.5 billion, as well as spending cuts of J$2.95 million.
Collections of GCT amounted to J$11.8 billion on Jamaican consumers, and J$8.6 billion on importers - a combined J$2.3 billion more than estimated.
Signs that the economy still has challenges were evident in the underperforming personal-income tax numbers which, at J$12.4 billion, fell J$2 billion, or 14 per cent short, suggesting that jobs are still being lost or more salaries are being cut; and in customs duty that was off by J$1.05 billion, or 20 per cent - adding J$4.4 billion to the treasury instead of the expected J$5.45 billion.
Spending warrants
Government in the quarter issued J$86 billion of spending warrants - the expectations was for spending to come in at just under J$89 billion - with the majority of savings coming from debt-servicing charges.
Interest payments were J$1.655 billion below budget. Salaries, which form the second-largest charge on the recurrent budget, were also J$422 million below target.
Within the quarter, the two items ate up J$53 billion, or just under 62 per cent of total expenditure.
The finance ministry's borrowings were also off target, with Jamaica buying J$60 billion of debt, or $6.8 billion more than projected.
Instead of the $2.07-billion deficit on the overall operating balance that Finance Minister Audley Shaw had originally anticipated, the heavy push into the domestic bond markets, as well as higher external receipts, has produced a J$10.3 billion surplus.
The primary balance, which tracks the sustainability of government operations when debt-servicing charges and new borrowings are eliminated, ended the quarter at a cushy J$10.6 billion surplus, or $4 billion above target.