Basseterre, St. Kitts – Nevis
December 18th, 2007 (CUOPM)
The Federal Government of St. Kitts and Nevis realized EC$386.3 million in Total Recurrent Revenue, exceeding the EC$339.5 million that was recorded in 2005 by EC$46.8 million or 13.8 percent.
This has been disclosed by St. Kitts and Nevis Prime Minister and Minister of Finance, Hon. Dr. Denzil L. Douglas, who stated that all categories of Recurrent Revenue reflected an increase over the previous year with the exception of Taxes on Income which was EC$5.0 million or 5.4 percent less than the EC$91.7 million that was reported in 2005.
Significant increases were, however, recorded in Taxes on Domestic Goods and Consumption which grew by EC$23.7 million and Non-Tax Revenue which rose by EC$22.1 million.
Dr. Douglas said that the growth in Recurrent Revenue was mainly due to the collection of stamp duty from the private sale of lands, mostly on the South East Peninsula and the introduction of the electricity fuel surcharge.“You may recall, Madame Speaker, that my Government reluctantly took the decision to pass on the increase in fuel charges to the consumers in November 2005 as we could no longer afford the huge subsidies that we were forced to pay because of the dramatic increases in the price of oil. Even now the monies received in relation to the fuel surcharge do not fully cover the increased cost of fuel. This is because we were particularly concerned about the impact of the increased cost on low-income families and granted an exemption from the surcharge to all households consuming less than 100 kilowatt hours per month. This is consistent with the tradition and mandate of the Labour Party to defend and protect the poor and vulnerable groups in our society,” said the Prime Minister.
He reaffirmed the commitment of his St. Kitts – Nevis Labour Government containing expenditure as part of the Fiscal Stabilisation Programme.
“For 2006, Total Recurrent Expenditure amounted to EC$398.9 million, an increase of EC$35.3 million or 9.7 percent over the amount reported in 2005. The expansion in Recurrent Expenditure was mostly due to an increase in interest payments to service the debt. It should be noted, Madame Speaker, that having taken the bold step to close the Sugar Industry, the Government now has to service the SSMC debt. The debt service payments that were made on behalf of the SSMC in 2006 totalled EC$19.9 million. Total Transfers, however, declined by 15 percent or EC$8.3 million when compared to 2005 when severance payments were made to the SSMC workers,” Dr. Douglas disclosed.
He praised the Federation’s Revenue Collection Agencies, which continue to make a concerted effort to ensure compliance with the various tax acts and build on their training in tax administration and collection.
“As a result of their hard work coupled with the various Ministries’ efforts to contain expenditure, the Recurrent Account Deficit of EC$12.6 million was a great improvement over the 2005 deficit of EC$24.2 million and the lowest since 1998. The rate of growth in revenue collections continues to surpass the growth in Recurrent Expenditure. This has translated into improved Recurrent Account and Primary Balances,” said Dr. Douglas.