The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The $75 million generated by Value-Added Tax (VAT) helped the Government enjoy its first quarterly revenue surplus for four years during the 2014-2015 fiscal year’s third quarter.

Yet the Central Bank of the Bahamas’ quarterly report for the three months to end-March 2015 revealed that while the new tax income slowed the national debt’s growth, it still rose modestly by almost $18 million during that period.

“On the fiscal side, VAT-led gains in revenue secured a surplus in the overall balance for the third quarter of fiscal year 2014-2015 - the first in four years,” the Central Bank said.

“However, borrowings for the period covered pre-planned domestic long-term debt issues and external project-based loan drawdowns.”

The Government’s total revenues for the three months to end-March 2015 rose by 24.8 per cent to $488.4 million, outpacing the 8.9 per cent spending rise to $479.9 million.

This, the Central Bank said, resulted in “an overall surplus” for the quarter of $8.5 million, compared to a $49.4 deficit for the same period in the 2013-2014 fiscal year.

VAT revenues generated some $74.9 million for the first three months of 2015, driving tax revenues higher by 24.5 per cent or $86.1 million.

“Selective taxes on services also grew by $9 million (59.8 per cent) to $24 million, as the payment of back-taxes by ‘web shop’ operators boosted gaming tax collections more than three-fold, to $17.6 million,” the Central Bank report added.

Yet while VAT appeared to immediately arrest the rate of growth in the national debt, this figure continued to climb, ending March 2015 at $6.304 billion.

“The direct charge on the Government was relatively unchanged at $5.602 billion over the quarter, but grew by $579 million (11.5 per cent) year-on-year,” the Central Bank said.

“Government’s contingent liabilities expanded by $17.6 million (2.6 per cent) over the quarter, and by $60 million (9.4 per cent) on an annual basis, to $701.6 million, mainly attributed to a rise in the outstanding debt of the Public Hospital Authority.

“Given this outturn, the National Debt - which includes contingent liabilities - increased by $17.9 million (0.3 per cent) over the three-month period, and by $639.0 million (11.3 per cent) year-on-year, to $6.304 billion.”