The St Vincent and the Grenadines Parliament on Wednesday (January 22) began debating the Estimates of Revenue and Expenditure in the EC$1.2 billion (One EC dollar=US$0.37 cents) national budget.
Included in the budget is the inclusion of a two per cent salary increase for public workers and other new job opportunities.
According to Finance Minister Camillo Gonsalves the fiscal package represents an increase of 11.2 per cent over the EC$1.067 billion which was approved last year.
Recurrent expenditure inclusive of amortisation and sinking fund contributions amount to EC$875.5 million, while capital expenditure is pegged at EC$310.7 million, based on the official figures.
“The improved revenue performance in 2020 is reflective of predicted real economic growth projected for the year and stronger and more efficient efforts by the main revenue agencies…”– Finance Minister Camillo Gonsalves
Gonsalves said the budget will be financed by current revenue of EC$680.03 million and capital receipts of EC$505.3 million. As a consequence current account surplus is two million dollars.
“The improved revenue performance in 2020 is reflective of predicted real economic growth projected for the year and stronger and more efficient efforts by the main revenue agencies, to collect taxes that are due and payable,” Gonsalves said.
What’s more, the Finance Minister said that revenue from non-tax sources is expected to contribute EC$585.5 million to the government coffers while non-tax revenue is expected to bring in a further EC$94.4 million.
Tax revenue is expected to grow by three per cent based mainly on taxes from income from profits, an increase of EC$3.4 million, taxes on goods and services, estimated at EC$9.2 million and taxes on international trade and transactions, put at five million EC dollars.
The government said non-tax revenue is expected to contribute EC$94.4 million. Of this amount, sales of goods and services are projected to generate EC$78.3 million, while revenue from non-tax sources is expected to see inflows from property income of EC$10.4 million, and other revenue of EC$10.2 million in taxes.
The Finance Minister said the 2020 budget for wages and salaries estimated at EC$269.7 million is 3.6 per cent higher than the approved amount for 2019, with this year’s two per cent salary increase for government workers as the main contributor to the higher amount.
Government’s allocation for the payment of pensions and government’s counterpart contribution to the NIS for civil servants is EC$72.6 million and Gonsalves said retirement benefits continue to be the single fastest-growing item of recurrent expenditure.
The public debt stood at EC$1.6 billion at the end of 2019.