|Q1 tax receipts plummet $94.7M|
Guardian Business Editor
Published: Jul 17, 2012
Total revenue fell in the first quarter of this year by $85.3 million, or 19 percent, led by a marked decline in tax receipts and non-trade stamp tax.
The disclosure, included in the Central Bank's Quarterly Economic Review, reveals that government budgetary operations recorded a deficit of $74.7 million. Tax receipts, accounting for the lion's share of total revenue collections, dropped by more than 22 percent, or $94.7 million. The report further stated that non-trade stamp taxes were slashed by half to $39 million. It explained that the sale of an oil company accounted for an usual high boost in revenue last year for this category.
The fall in revenue was also felt in selective taxes on services, declining 36.9 percent, or $8.1 million. Departure tax receipts dropped 7.2 percent, or $2.2 million.
Meanwhile, as revenue dropped, expenditures were on the rise.
"Current spending, which accounted for 85.4 percent of total outlays, grew by 2.9 percent to $375 million, and capital expenditures rose by 14.6 percent to $53.5 million," the report noted. "However, net lending to public corporations declined by 28.4 percent to $10.5 million."
The spike in current outlays was fueled primarily by higher tourism and transportation-led expenditures, the report noted. Capital expenditure gains came from the government's ongoing infrastructure development program, such as the road works.
The silver lining came in the form of consumption related to spending, which showed growth of 6.5 percent, or $14.3 million.
In its overall assessment, the Central Bank said the Bahamian economy continued to grow at a modest pace. It highlighted poor employment conditions as a key ongoing challenge, and rising prices and inflation are also putting on strain on the economy.
That said, the report revealed considerable progress in the tourism sector.
Expanded airlift, ongoing travel incentives and a recovery in group business made for a relatively successful first quarter in the sector.
"Overall tourism arrivals were up 10.8 percent to approximately 1.7 million," it stated.
While air arrivals took a big seven percent hit last year, the first quarter saw a promising recovery of 11.2%. The Family Islands specifically saw a similar gain of 3.3 percent in air arrivals.
In terms of construction, the first quarter showed robust large-scale foreign investments in the hotel sector, spurred by the ongoing Baha Mar project. Domestic private sector construction activity was "comparatively lackluster".
"Mortgage disbursements for new construction and repairs, as reported by domestic banks, insurance companies and the Bahamas Mortgage Corporation, were lower by 32.4 percent at $27.5 million, extending the prior year's 15.4 percent fall-off. In particular, residential activity contracted by 33.4 percent to $26.7 million, relative to last year's 2.8 percent decrease."
New mortgage commitments for buildings and repairs revealed that the sector is very much in recovery mode. Total commitments fell more than 44 percent, to 26 projects.
Commercial loan commitments also experienced a decline.