Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review ST VINCENT AND THE GRENADINES

Fiscal and Debt Developments

$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 income 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

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

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

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