Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review ST KITTS AND NEVIS

in the hotels and restaurants, construction and manufacturing sectors.

Current revenue, rose by 34.0 per cent to $1,006.0m in 2018 (35.8 per cent of GDP), in contrast to a 1.9 per cent decrease to $750.5m (28.0 per cent of GDP) in 2017. An increase in non-tax revenue largely accounted for the rise in current revenue. Non-tax receipts, rose by 84.0 per cent to $466.7m (16.6 per cent of GDP), for the most part influenced by a surge in inflows from the Citizenship by Investment Programme (CBI). Receipts from the CBI programme more than doubled to $366.4m from $156.9m in 2017, due to a resurgence in the programme following the successful introduction of the Hurricane Relief Fund and the subsequent Sustainable Growth Fund. Meanwhile, collections of tax revenue, rose by 8.5 per cent to $539.3m (19.2 per cent of GDP), attributable to buoyancy in receipts from all of the sub-components. Taxes from income and profits rose by 13.3 per cent to $151.9m attributable to higher collections from company tax (23.7 per cent) and withholding tax (33.0 per cent). The revenue collections from international trade and transactions totalled $156.6m, which was 8.5 per cent larger than the outturn in 2017. This higher level of revenue was primarily attributable to higher receipts of import duty (7.5 per cent), customs service charge (7.8 per cent) and travel tax (63.7 per cent). Revenue from taxes on domestic goods and

Fiscal and Debt Developments

The fiscal operations of the Federal Government resulted in an estimated overall surplus (after grants) of $188.4m (6.7 per cent of GDP), compared with one of $51.2m (1.9 per cent of GDP) in 2017.

Likewise, the primary surplus (after grants) more than doubled to $227.3m (8.1 per cent of GDP), compared with one of $92.1m (3.4 per cent of GDP) in 2017. The higher overall fiscal surplus was largely attributable to a widening of the surplus on the current account, owing to increases in tax and non-tax revenue. Similarly, a surplus on the current account was recorded, which represented an almost three-fold increase to $271.3m, in contrast to a 17.5 per cent contraction in 2017.

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