The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government generated a modest $6m Budget surplus during January 2023, which enabled it to enjoy a rare month when its direct debt actually shrank albeit only by $8.5m.

The Ministry of Finance’s fiscal report for the first month of the calendar year, which typically marks the start of the richest revenue quarter for the Government, disclosed a second monthly surplus for the 2022-2023 fiscal year following Julys $41.3m.

A surplus means that the Government earned more in taxes and other revenue than it actually took in for the month. Total revenues, aided by $132.1m in VAT collections, stood at $266.9m while January’s total expenditure came in at $260.9m.

The VAT figure represents December payments, including the peak Christmas sales period, and includes receipts from both monthly as well as quarterly filers. As a result of the modest surplus, the Government’s fiscal deficit for the first seven months of the year stood at $270m or 46.9 percent of the $575.4m projected for the full year.

“During the month, revenue receipts firmed by $38.8m (17 percent) to $266.9m when compared to the prior year. This improved performance was primarily driven by increased international trade and transaction tax collections ($16.3m), VAT collections ($12.8m), and property tax collections ($8m),” the Ministry of Finance said in a statement.

“Month-over-month, total revenue grew by $77.8m (41.1 percent) owing to improved VAT collections ($58.3m) and other non-tax revenue collections ($17.9m). On the expenditure front, total expenditure rose $19.7m (8.2 percent) to $260.9m relative to the prior year.

“Outlays primarily increased for the acquisition of non-financial capital assets ($12.4m) and insurance premiums ($6m). Month-over-month, spending was contained by $21.1m (7.5 percent) mainly due to a reduced outlays on subsidies ($19m). As a result of the above, Government’s fiscal position for January 2023 resulted in a $6m surplus and a decrease in the net debt position by $8.5m.”

The Ministry of Finance, breaking down how the Government’s direct debt had reduced, added: “Proceeds of borrowings during the period totalled $260.2m via $15m in Bahamas Registered Stock, $205m in Central Bank advances, $0.2m in Treasury Bill placements and $40m in domestic loans.

“Repayments totalled $268.8m owing to repayments of $205m for Central Bank advances, $25m for maturing Treasury stock, $22.2m for domestic loans and $16.2m for foreign currency loans.” On the revenue front, the Ministry of Finance said: “Tax collections totaled $223.6m, supported by $132.1m in VAT receipts; $50.7m in international trade and transactions taxes; $23.1m in other taxes on goods and services; and $17.4m in property taxes.

“Non-tax revenue collections of $43.3m were explained by $17.9m from the sale of goods and services, and $25.4m in other non-tax revenue.” As for expenditure, the Ministry of Finance said: “Recurrent expenditures totaled $236.1m, a 2.7 percent ($6.2m) increase compared to the prior year.

“Outlays comprised $64.4m in personal emoluments; $39.5m on the use of goods and services; $47.9m in public debt interest payments; $33m in subsidies; and $19.2m in social assistance and transfer. Capital expenditures increased by 119.3 percent ($13.5m) to $24.8m comprised of $22m to acquire non-financial assets and $2.8m in capital transfers.”