Lawmakers in St. Vincent and the Grenadines will on Monday resume debate on estimates of income and expenditure of EC$971,367,582 for 2015, amidst a call by the opposition for the government to present a budget that it can implement.
Prime Minister and Minister of Finance Ralph Gonsalves told Parliament on Thursday that the 2015 budget is to be financed by current revenue of EC$532,343,200 and capital revenue of EC$439,024,382.
Gonsalves said the current account deficit of EC$28.05 million, is a decline of EC$10.7 million or 27.4 per cent compared with the budgeted deficit for 2014. Current revenue, at EC$532.3 million, is an increase of 2.3 per cent over 2014.
The government has estimated that tax revenue receipts will amount to EC$485.6 million, 4.7 per cent or EC$21.6 million higher than in 2014. Non-tax revenue is expected to decline in 2015, with EC$46.8 million budgeted to be collected from this source.
Taxes on international trade will yield an estimated EC$207.8 million, 9.5 per cent or EC$18.1 million higher than 2014, and will be due mainly from increased inflow from all sources of revenue under this rubric, Gonsalves said.
In 2015, in flows from incomes and profit will contribute EC$123.7 million in revenue, the government said.
“While this source will yield approximately 23.2 per cent of the current revenue in 2015, it is going to be marginally below the estimate for 2014, by about 0.6 per cent,” Gonsalves said.
A 10 per cent decline in income tax from corporations, coupled with increases of 2.7 per cent and 1.3 per cent in personal income tax account, for the marginal decline of this tax type, Gonsalves said.
Taxes on domestic goods and transaction are expected to contribute EC$199.2 million to the central government in 2015 — 3.4 per cent or EC$3.9 million higher than last year.
In 2015, under the Registry Department, an increase in the collection of stamp duties is expected to generate an additional EC$3 million. Excise duties and insurance premium tax revenue will yield an additional EC$0.54 million and EC$0.56 million, respectively.
“We’ve had to craft these Estimates in continuing challenging circumstances globally, and, also, in the aftermath of all the financial disasters that we’ve had. And, of course, the impact on the diminution to the point of almost extinction of the market preferences for our bananas and Windward bananas and Jamaican bananas in the British market,” Gonsalves told lawmakers.
But Opposition Leader Arnhim Eustace, in his response, said while there is important information in the estimates, they do not make clear whether the revenues are available to achieve the outcomes set out for the estimates and the budget in January.
He noted that the government is planning for expenditure of EC$532.3 million, a deficit of EC$142.6 million when compared to estimated receipts.
“I cannot look at the capital budget and see exactly what clears that deficit so that we can have a balanced budget. We have known in previous years that other capital receipts were inflated in order to bring about balance,” he said.
Eustace said he has found that when faced with these deficits, the government cuts back its capital programme.
Eustace, an economist, however said that growth prospects are mostly dependent on the capital, rather than recurrent budget and therefore the nation should not be cutting its capital budget to that magnitude.
“So, we need to present something that is real, something that is achievable. We don’t get that,” he told Parliament.