Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review ST VINCENT AND THE GRENADINES

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112

Eastern Caribbean Central Bank

Fiscal and Debt Developments

The operations of the government are

estimated to have resulted in an overall

deficit of $22.9m (1.0 per cent of GDP) in

2018, narrower than that of $35.1m

(1.7 per cent of GDP) in the previous year.

This improvement was largely driven by

developments in the current account. In

contrast, a primary surplus of $27.0m

(1.2 per cent of GDP) was recorded in 2018,

following one of $14.6m (0.7 per cent of

GDP) in 2017.

The current account surplus improved to

$21.0m (1.0 per cent of GDP) following one

of $19.0m (0.9 per cent of GDP) in 2017,

largely reflecting growth in current revenue.

Current revenue rose by 2.0 per cent to

$594.6m (27.1 per cent of GDP) from

Property income includes interest and rent earned on government assets and dividends from statutory companies

$582.6m (27.7 per cent of GDP) in 2017,

reflecting expansions in four of the seven

major tax categories, namely, taxes on goods

and services, the sale of goods and services,

property income and other current revenue.

The additional intake of $21.0m in revenue

from taxes on goods and services was

positively affected by advances in the

collection from the value-added tax (VAT).

VAT receipts for the period rose by $21.0m

(12.3 per cent), reflecting the impact of the

first full year of the one percentage point

increase of VAT to 16 per cent. Meanwhile,

the increased outturn of $5.1m in the receipts

from the sale of goods and services partially

reflected the higher receipts from driver’s

license fees and customs service charge.

Property incom

e 13

remained volatile and

generated an additional $2.4m intake than that

of the previous year to total $8.2m.

The sundry revenue category, Other current

revenue, recorded total receipts of $9.5m,

which was $0.5m higher from the previous

year. These expansions were offset by lower

receipts from the remaining three major tax

categories, namely taxes on property, taxes on

international trade, and taxes on income and

profits. Lower collections from stamp duty on