NASSAU, Bahamas– The Bahamas government says it had collected US$2.6 billion in revenue during the 2021/2022 fiscal year, representing an increase of more than US$700 million compared to the previous fiscal year.
A statement issued by the Ministry of Finance noted that the improved revenue collection represents an increase of US$364.1 million over the original revenue forecast for the fiscal year, which ended June 30, and $269.8 million over the revised budget target.
It said that this improvement was recorded despite a reduced value-added tax (VAT) from 12 to 10 percent on January 1, this year.
During his budget presentation in May, Prime Minister and Minister of Finance Philip Davis had projected revenue collections for 2021/2022 would be in the vicinity of US$$2.45 billion, an increase of US$$208.6 million above the revenue targets established in June 2021.
But the “Twelve Month Report on Budgetary Performance FY2021/July 22 – June” showed key improvements in tax revenue for VAT of US$395.7 million, excise duties of US$81.7 million, departure taxes of US$74.2 million, customs and other import duties of US$56.2 million, stamp taxes (financial and realty) of US$25.5 million, license to conduct the particular business activity of US$19.4 million, and gaming taxes of US$13.5 million.
The ministry said that immigration fees of US$31.2 million largely drove growth in non-tax revenue and interest and dividend receipts of US$37 million. The government received a dividend of US$24.5 million from the Bahamas Telecommunications Company during the second quarter.
In the statement, the Ministry of Finance noted that “amidst improved global vaccination rates and reduced deaths and hospitalizations attributed to the COVID-19 virus, original estimates placed output growth in The Bahamas at 14.4 percent for the financial year 2021/22.
“Owing to rapid demand increases and supply chain disruptions as the global economy rebounded from the COVID-19-induced economic downturn, inflationary pressures rose during the first half of the fiscal year.
“These inflationary pressures were exacerbated during the second half of the fiscal year following the Russian invasion of Ukraine in February 2022, constraining global growth levels. Domestically, the result was a year-over-year increase in consumer prices for all items to 6.2 percent by end-June 2022,” the statement said.
The ministry noted that despite contractions in global growth, the Bahamian economy maintained a steady pace of recovery, supported by rebounding tourist arrivals.
“The change in political administration, which ended COVID-19 emergency orders and relaxed many restrictive health and safety protocols, further spurred domestic activity.”
The Ministry of Finance reported that for the 2021/2022 fiscal year, total expenditure aggregated US$3.2 billion, 95.6 percent of the budget, representing a US$54.5 million increase over the previous year.
It said this total includes US$251.4 million in additional financing approved in May 2022 to settle an equivalent amount of arrears and claims on government owing from prior fiscal periods.
The ministry said that in recurrent expenditure developments, compensation of employees grew by US$24.4 million to US$725.3 million, mainly owing to the reinstatement of increments, promotions, and other discretionary benefits withheld during the COVID-19-induced economic downturn.
Other essential items include US$633.4 million for acquiring goods and services, US$551.8 million in public debt interest payments, and US$491.6 million in subsidies to government-owned and controlled enterprises.
Capital expenditure contracted by US$87.4 million to US$283.6 million, as capital transfers to support businesses impacted by the pandemic lessened by $37.4 million.
Government debt at the end of June 2022 totaled US$10.8 billion, or 85.2 percent of gross domestic product (GDP), compared to 100.9 percent of GDP at the end of June 2021.
The ministry said that the national debt totaled US$11.1 billion.
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