GOVERNMENT yesterday reported a $17.8-billion revenue shortfall for the first seven months of this fiscal year, admitting it was forced to clamp down on discretionary duty and tax waivers as a result.

“All categories of revenue are performing below projection as the decline in the economy has continued due to the world recession,” Information Minister Daryl Vaz said in sober tones as he updated journalists at the Post Cabinet press briefing at Jamaica House.

Describing the country’s fiscal situation as a “great concern to the Government”, Vaz said that total revenue for the first seven months of the fiscal year 2009/2010 was $156.5 billion, which 10.2 per cent or $17.8 billion below budget.

The information minister also reported that total expenditure for the similar period was $235.5 billion, which amounted to $7.2 billion or three per cent less than budget.

Vaz said that Government owed large amounts of money to various suppliers and disclosed that: “Many of these companies are requesting that taxes and statutory deductions owed to Government are used to set off the amount owed by Government.”

In response, Cabinet took the decision that as of December 1, there would be a freeze on the granting of discretionary waivers of duties and taxes except for approved charitable and not-for-profit organisations and special humanitarian cases.

As a consequence of the change in policy, Vaz said, industries already receiving tax incentives under law but wishing to receive further incentives by way of discretionary waivers would no longer be accommodated.

Additionally, manufacturers intending to purchase goods from non-Caricom countries, whose goods are not allowed to enter the country duty free, must first receive Caricom suspension certificates before such importation.

All existing Government contractual obligations wouid be honoured, he assured.

“Additionally all requests for waivers will be duly processed by the taxation policy division of the ministry of finance and a response provided within eight days,” he pledged.

As of December 1, all approval for waivers will be gazetted and publicised no later than 14 days after approval, on the ministry of finance’s website or in the daily newspaper.

In the meantime, Vaz, responding to a question on how the debt to suppliers might affect the smooth operation of public institutions, said Cabinet has instructed that all outstanding amounts for suppliers should be compiled.

“So we can look at what it is and see how we can address it to ensure that the critical services are not affected,” Vaz said.