Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review

DOMESTIC ECONOMIC DEVELOPMENTS

other hand moved to a primary deficit position from its small surplus one year ago. The governments’ current operations yielded a surplus of $581.0 (2.9 per cent of GDP) compared with one of $360.8m (1.9 per cent of GDP), as the rate of increase in revenue collections outpaced that of current expenditure. Current revenue grew by 11.3 per cent to $5,265.9m (26.2 per cent of GDP) in contrast to a contraction of 1.2 per cent to $4,731.1m (24.8 per cent of GDP) noted a year earlier. The increase in current revenue resulted from enhanced intakes from both non-tax and tax revenues.

when non-tax revenue contracted by 11.2 per cent ($113.1m) to $900.17m (4.7 per cent of GDP), which largely reflected a downturn in Dominica’s intake. Tax revenues increased by 6.5 per cent ($248.8m) to $4,079.7m (20.3 per cent of GDP) compared with growth of 1.5 per cent to $3,830.9m (20.1 per cent of GDP) recorded in the previous year. Growth in tax revenue was buoyed by higher intakes from all categories of taxes, except the property tax. Receipts from taxes on domestic goods and services rose by 7.5 per cent ($124.1m), led by higher collections from the value added tax (VAT), supported by an increase in the intake from the sales tax. VAT receipts were up by 11.3 per cent to $1071.1m (5.3 per cent of GDP), reflecting improved performances in five of the territories – Dominica, Grenada, St Kitts and Nevis, Saint Lucia and St Vincent and the Grenadines. Additionally, yields from the sales tax grew by 17.5 per cent, a reflection of growth in collection from the Antigua and Barbuda Sales Tax, which was driven by enhanced administration and investment in its IT system.

Non-tax revenue grew by 31.8 per cent ($286.1m) to $1186.2m (5.9 per cent of GDP), primarily due to growth of 51.5 per cent in proceeds associated with the Citizenship by Investment Programmes in St Kitts and Nevis and Saint Lucia. This performance contrasts the outturn in 2017,

Also contributing to the uptick in tax revenue, was an increase of 9.3 per cent ($109.3m) to

______________________________________________________________________________ 8 Eastern Caribbean Central Bank