KINGSTOWN, St. Vincent, The Parliament has approved Estimates of Income and Expenditure of EC$1.5billion (One EC dollar=US$0.37 cents)for the 2023 fiscal year, an 8.8% increase over the approved budget for 2022.
The estimates were approved even as the opposition complained, for yet another year, that the capital budget is bloated by Other Receipts, representing 30% of the capital budget.
With the vote in Parliament, the Minister of Finance Camilo Gonsalves can present the Budget on January 9, 2023.
In presenting the Estimates, Gonsalves said the budget for 2023 is broken into recurrent expenditure, inclusive of amortization and sinking fund contributions, of EC$974,323,500 and capital expenditure of EC$471,563,113.
Financing is expected to come from current revenue of EC$761,431,200 and capital receipts totaling EC$684,455,414.
The 2023 current expenditure, exclusive amortization, and sinking fund contributions amount to EC$771,708,133, and current revenue is estimated at EC$761,431,200.
“Consequently, there is a current deficit projected in the Estimates of EC$10.3 million,” the finance minister told lawmakers.
“The projected improvement in revenue performance for 2023 is indicative of the uptick in real economic activity projected for the year 2023,” Gonsalves said.
He said revenue from tax sources is expected to contribute EC$648.3 million to the Consolidated Fund in 2023, while non-tax revenue is estimated to gross EC$113.2 million.
Tax revenue is expected to increase by 11.3%.
As regards the major tax types, taxes on income and profits are estimated to increase by EC$8.3 million, or 5.3%. Taxes on goods and services by EC$20 million or 10.4%, and taxes on international trade and transactions by 27% or EC$45.7 million.
Non-tax revenue collection in 2023 is estimated at EC$113.2 million — 19.2% more than the amount budgeted in 2022.
Non-tax revenue is expected to come mainly from sales of goods and services, which is projected to generate EC$95.9 million — EC$20.2 million more than the amount collected in 2022.
Revenue from non-tax sources is also expected to come from inflows from other miscellaneous sources in the amount of about EC$12 million, Gonsalves said.
Gonsalves said compensation of employees would see an increase of EC$19.8 million or 5.6%, and other transfers, including social assistance, training, grants, and contributions to local, regional international organizations, are expected to realize an increase of EC$13 million or 9.6%.
The budget for expenditure on goods and services in 2023 is EC$109.7 million — A 5.6% year-on-year increase.
The capital estimates in 2023 amounted to EC$471.6 million — an 18.6% increase or EC$74.1 million over the approved capital budget for 2022.
“The capital budget, which reflects the government’s public sector investment program, is an important developmental tool, which it uses to translate vision and strategy into tangible project activities,” Gonsalves said.
“The Public Service Improvement Programme outlines the government investment priorities and programs that are designed to enhance capital formation, build resilience, promote competitiveness and stimulate economic growth.”
He told Parliament that the capital program was conceptualized in such a way as to facilitate growth over the medium term and to defend against the impacts of climate change and natural disasters.
The finance minister said that while a significant amount of the money in the tourism capital budget for 2023 is within the Unleashing the Blue Economy of the Caribbean (UBEC) program, the expenditure is largely agricultural.
He also disclosed that the main multilateral donors in 2023 will be the European Union, the UK- Caribbean Infrastructure fund, the Caribbean Development Bank, and the Global Environmental Facility.
“The government of St. Vincent and the Grenadines will also receive grants totaling EC$23.6 million from a number of friendly governments,” Gonsalves said.
He said the largest contributors for 2023 grant financing include Taiwan, Japan, Morocco, and India.
While the main sources of multilateral loan financing in 2023 are the Caribbean Development Bank; the International Development Agency of the World Bank; the European Investment Bank; the OPEC Fund for International Development; the CARICOM Development Fund; ALBA, and Demerara Bank Ltd. of Guyana.
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