Tax revenues pick up, but no signs of windfall to cover March shortfall
TAX revenues outperformed expectations in April but the inflow for that month alone was not enough to cover the almost $25-billion shortfall recorded in March.
Ministry of Finance data show that in April, the first month of the 2024/25 fiscal year, the Government collected over $65 billion in taxes. That was $3.5 billion more than budgeted for.
But a deeper examination of the figures shows corporate income tax, which underperformance in March was mainly blamed for the overall shortfall in taxes, did not pick up substantially in April. During the month, corporations paid out $1.9 billion in tax on their profits, and while that was $884 million more than was budgeted for, it was not enough to claw back some of the $14-billion shortfall from March.
Just last month the Government rang the alarm on underperforming tax intake in the fiscal year which ended in March, and said this had implications for revenue estimates in the current fiscal year.
Finance Minister Nigel Clarke then told the Jamaica Observer that he is keeping his eye on the development and will assess options “to ensure prudent fiscal operation and the attainment of legislated targets”.
He also said that Tax Administration Jamaica (TAJ) will pursue those entities which have declared profits and are to file returns, but are yet to do so.
“Several entities/individuals who filed did not make the indicated tax payments within the required timeline. The Government will be pursuing payment related to these returns via its comprehensive compliance systems,” Clarke wrote in a release last month.
Efforts to get a comment from Clarke on the April performance and an update on how it fits into the bigger picture going forward proved futile.
Still, the data show spending in April was lower than planned.
In all, the Government spent $86 billion during April — which was $8.6 billion below budget — with every area of expenditure being lower than what was outlined at the start of the fiscal year. That includes lower-than-anticipated spending on Government programmes, though it is difficult to say which from the raw data. Public sector compensation was also below budget, as was spending on interest on debt repayment and capital expenditure, which is already playing catch-up with the level of expenditure in April being lower than planned.
