Economic and Financial Review - June 2019

June 2019 Economic and Financial Review SAINT VINCENT AND THE GRENADINES

primarily by higher yield from the Value Added Tax (9.4 per cent), telecomm broadcast licence; which rose by more than six- fold and interest levy; which rose nearly ten-fold. Higher receipts for telecomm broadcast licence was attributable to a lump sum payment, while the increases in interest levy receipts reflected intensified efforts on the part of authorities to recoup outstanding arrears. An increase of 23.1 per cent was recorded in the revenue from taxes on property, fuelled by higher inflows from stamp duty and alien land holding licence of 27.1 per cent and 73.0 per cent, respectively. Concurrently, there was a 0.9 per cent increase in inflows from taxes on income and profits driven by collections of withholding tax from non-residents. In contrast, the growth in current revenue was partially mitigated by a 10.9 per cent reduction in collections from taxes on international trade and transactions and a 3.8 per cent decline in taxes on sales of goods and services. Lower receipts of taxes on international trade and transactions for the most part reflected lower receipts from import duty (6.6 per cent) and vehicle surtax (36.3 per cent); associated with declines in vehicle imports. Reductions in the receipts from sales of goods and services was broad based and mainly influenced by decreases in

outlays for employees’ compensation, transfer payments and goods and services. Compensation to employees, which comprised approximately half of current expenditure, rose by 5.8 per cent ($8.3m) on account of growth in both wages and salaries and NIS contributions influenced by salary increases granted to teachers. Concurrently, higher outlays on transfers and goods and services resulted in increases of 7.4 per cent ($5.1m) and 10.2 per cent ($3.0m) respectively. Interest payments registered a more modest increase of 1.0 per cent ($0.3m).

St Vincent & the Grenadines Public Finance

EC$M

200.0

150.0

100.0

50.0

0.0

-50.0

19 Q1

15 Q4

16 Q1

16 Q2

16 Q3

16 Q4

17 Q1

17 Q2

17 Q3

17 Q4

18 Q1

18 Q2

18 Q3

18 Q4

19 Q2

Recurrent Revenue Recurrent Expenditure Current Account Balance

Partly attributable to improvements in tax administration, and the estimated improvement in economic activity, current revenue registered growth of 5.1 per cent to $283.2m during the first half of 2019. Collections of taxes on goods and services were higher by 8.8 per cent, buoyed

98

Eastern Caribbean Central Bank