SLOW CLIMB: Govt revenue improves in third quarter but still down nearly 30 percent – EyeWitness News

NASSAU, BAHAMAS While the government saw an improvement in its revenue intake during the third quarter of the fiscal year due to the continued relaxation of COVID-19 restrictive measures and the restart of the tourism sector, total revenue still saw a nearly 30 percent decline over the same period in the previous fiscal year.

According to the Ministry of Finances combined nine-month fiscal snapshot and report: The continued relaxation of COVID-19 restrictive measures during the third quarter FY2020/21 and the restart of the tourism sector have improved Bahamian economic activity, resulting in a firming of revenue collection in the third quarter FY2020/21.

Compared with the same period in FY2019/20, however, total revenue declined by an estimated $527.4 million (30 percent) to $1,229.7 million or 70 percent of last years collection and 69.8 percent of budget.

The Ministry of Finance noted that the third-quarter fiscal results confirmed that the Bahamian economy, although still below pre-crisis performance, is steadily progressing along the path of recovery.

Value-added tax (VAT) receipts strengthened to $183.4 million in the third quarter, from $151.7 million in the second quarter and $134.7 million in the opening quarter of FY2020/21.

It was also noted that during the third quarter, there was a boost in collections of real property taxes, increasing year-on-year by $11 million for the quarter due to the Real Property Tax (RPT) Forgiveness Programme, as well as a steady recovery in VAT and business license receipts, in the context of broadening gains in economic activity.

It was also noted that improvement in VAT collections was aided by the expiration of certain clauses of the Special Economic Zone (SERZ) concessions designed to aid in the rebuilding of areas of Grand Bahama and Abaco damaged by Hurricane Dorian in September 2019.

State Minister for Finance Senator Kwasi Thompson noted: We are seeing moderate signs of economic recovery as we are able to stabilize the public health crises. The third-quarter fiscal results provide optimism for the future.

We are pleased to see economic activity return as the domestic economy and export sector open up more and more. It is important for us to stay disciplined and vigilant, and for the vaccine rollout to continue in earnest, to allow for the ongoing relaxation of restrictions.

It would be clear to all objective observers that the governments Resilient Bahamas Plan has proven effective in providing real and tangible assistance to Bahamians while supporting stable macroeconomic conditions. Further, consistent with the governments strategy, the plan has ensured that the country has been able to weather this economic storm, while still keeping its foreign currency reserves at high levels, allowing the Bahamian dollar to remain as strong and secure as it has ever been.

Thompson further noted: Although we have not achieved pre-pandemic levels, the third-quarter results clearly indicate the situation is improving and we have successfully prevented any worst-case economic scenarios from materializing.

Outside of the necessary increases in social welfare spending to maintain unemployment benefits and to provide food to those in need, we have managed to contain other discretionary expenses to offset these increases.

This is what we set out to do as part of our fiscal adjustment plan: curtail non-essential capital expenditure by $100 million. So far, we have had notable success and we feel confident we will meet our fiscal target.

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SLOW CLIMB: Govt revenue improves in third quarter but still down nearly 30 percent - EyeWitness News