GOJ: Deficit cut

The GOJ fiscal deficit for April was cut below projection, as revenues were marginally better while expenses, mainly interest cost, were lower than forecast. The deficit that was projected at $3.46 billion ended up $2 billion better, coming in at $1.43 billion.

Revenue growth | Tax on interest delivered $806 million more than planned, but the early payment of dividends in March by some companies resulted in tax on dividends under performing by $219 million. Special consumption tax brought in $735 million more and motor vehicle licenses accounted for $162 million of the increase and tax on telephone performed better than planned by $122 million.

Inflows below | There were areas that underperformed. GCT on local sales was 10 percent less reducing revenues by $666 million, surprisingly education tax was less by $144 million and betting & gaming tax brought in $188 million less than planned. Although travel tax was up 152  percent to $1.27 billion, an increase of $765 million tax on international trade was down $425 million as custom duty brought in $284 million less and Special Consumption tax on imports by $898 million. Tax on international trade may have been down as importers would most likely have brought in goods ahead of the new tax measures.

The government would have been pleased with the revenue performance which was slightly more than projected but which would have been even more had some taxpayers not taken advantage of the long time frame between increased taxes and the implementation of them to minimise their tax liability.

Spending down | Government paid $993 million less on interest or  13 percent less than originally planned and also spent less on wages $228 million and $384 million less on capital expenditure and they repaid $1.7 billion net on loans during the month.