Gov’t expecting $104m more in taxes in $1.85b 2025 Estimates

Minister of Finance Camillo Gonsalves has presented Estimates of Revenue and Expenditure for the 2025 fiscal year amounting to EC$1.85 billion, which anticipates an additional EC$104.7 million or 10% in tax receipts.

Parliament is expected to approve the figures, the largest in the nation’s history, later Thursday night, paving the way for the Budget Address on Monday, to be followed by four days of debate.

The EC$1,849,341,997 fiscal package for 2025 f is a 14.4% increase over the approved budget for 2024, when lawmakers approved a budget of EC$1.6 billion.

Gonsalves said the budget for 2025 is broken down into recurrent expenditure, inclusive of amortisation and sinking fund contributions of EC$1,150,713,466 and capital expenditure of EC$698,628,531.

The budget is to be financed from current revenue of EC$907,729,320 and capital receipts of EC$943,612,687.

In the recurrent estimates, the 2025 current expenditure, exclusive of amortization and sinking fund contribution, amounts to EC$913,313,475.

Current revenue is estimated at $907,729,320, meaning that there is a deficit of EC$5.6 million.

Gonsalves said the 2025 current revenue of EC$907.7 million is 11.9% or EC$96.9 million above the amount budgeted in 2024.

“This fairly strong anticipated revenue performance in 2025 is based on the projected expansion in real domestic economic activity of approximately 4.6%,” the finance minister told lawmakers.

Revenue from tax is expected to contribute EC$757.4 million to the government coffers in 2025, while non-tax revenue is expected to gross EC$150.3 million.

Tax revenue is expected to increase by 9.5%, with taxes on goods and services estimated to rise by $31.5 million or 13%.

Taxes on international trade and transactions are expected to increase by EC$9.7 million or 4.3% and taxes on income and profit are expected to go up by 22.2% or EC$36 million.

Gonsalves said non-tax revenue collection in 2025 is estimated at EC$150.3 million —  26% more than the amount budgeted in 2024.

He said that in 2025, non-tax revenue is expected to come mainly from sales of goods and services, which is projected to generate EC$111.3 million.

“This amount is estimated to be $12.5 million more than the amount budgeted in 2024,” the finance minister said, adding that revenue from non-tax sources is also expected to come from inflows from other miscellaneous sources.

“… and we anticipate that those non-tax sources will total $39 million,” Gonsalves said.

Meanwhile, the estimated recurrent expenditure, inclusive of the amortisation and sinking fund contributions is EC$1.15 billion.

This is 10% or $104.7 million more than the amount budgeted in 2024.

The recurrent expenditure for 2024 is made up of current expenditure of EC$913.3 million, amortization of EC$215.4 million, and sinking fund contributions of EC$22 million.

Current expenditure in 2024 increases by 9.3% year-on-year, amortisation is up 14.2% and sinking fund contributions remain flat, Gonsalves said.

Under current expenditure, compensation of employees increases by EC$21.2 million or 5.4%; pensions increase by 11.3% or EC$7.9 million and other transfers, which include social assistance grants, training and contributions to local, regional and international organisations, is expected to go up by EC$22.9 million or 14.6%.

For the recurrent expenditure budget by economic categories, compensation of employees amounts to $410 million; pensions — EC$77.9 million; other transfers — EC$179.5 million; debt service — EC$358.2 million; goods and services — EC$125.1 million for a total of $1.15 billion.

The 2025 wage bill is estimated to be 5.4% higher than the amount estimated in 2024 mainly because of the 2.5% salary increase to public servants, completing the 7% salary hike over three years.

“The second reason relates to increases in increments and the additional allowances that go with the number of the positions that were created,” the minister said, referring to the posts he detailed in his presentation.

The minister said the 2025 capital estimates amount to EC$698.6 million, which is 22.5% or EC$128 million more than the originally approved capital budget for 2024.

In July 2024, after the passage of Hurricane Beryl Parliament approved supplementary estimates of EC$136 million.

The finance minister said the government’s investment programme for 2025 “reflects its heavy focus on building up further public infrastructure, including the construction and repair of several roads, river and sea defences, the building of hotels, hospitals, clinics, schools, police stations, and, of course, homes…”

He said the Ministry of Urban Development will spend over EC$100 million, largely related to the completion of the modern port project, the Parliament and the halls of Justice.

The Ministry of Transport and Works is expected to spend EC$61 million, mostly on road construction and rehabilitation, while the Ministry of Finance, Economic Planning and Information Technology has earmarked over EC$46 million to be spent on projects ranging from digital transformation to the construction of hotels, health and education facilities.

The minister said government spending will increase significantly in 2025.

“Besides investment in big infrastructure projects like the port, the hospital and roads, the government is hiring labour and purchasing inputs to carry out its major housing rehabilitation programme,” Gonsalves said.

“In these 2025 capital estimates, the housing ministry is set to spend over $65 million with the vast majority of this expenditure related to the rehabilitation, and rebuilding of houses post-Hurricane Beryl.

“These expenditures are also expected to provide a direct boost to demand in the economy, increased workloads for our contractors, and, likely, a further tightening in our labour market in those particular skill categories,” the minister told Parliament.