Collection of PAYE taxes up to February, is ahead of target by $1 billion, according to data put out by the Ministry of Finance.
This category of individual tax contributions, was projected to generate $47.3 billion but contributed $48.3 billion instead, up to February.
The out turn is quite remarkable when viewed against the out turn at the end of December when there was a shortfall of $1.24 billion. For 2018 up to February, PAYE pulled in $2.3 billion more than planned or just over $1 billion more, monthly.
The current government, raised the personal tax threshold on which no taxes are paid, to $1.5 billion over a two year period, starting in July 2016 with the first tranche, with the second portion implemented in 2017. The estimated cost for the measure was over $25 billion in the current fiscal year. The government announced increased taxes to fund the give back, but data for the last two fiscal years show revenues increasing well in excess of forecast, an indication that there was no fiscal need, to effect the tax increases that were made at the time of implementing the threshold hike. Ongoing buoyancy in government revenues would have more than compensated for taxes lost but IMF demanded the increases apparently to stave off inflationary pressures that would have arisen if the increase in take home pay was not neutralised.
PAYE out performing forecast
GOJ chops $7.6b off deficit
Government of Jamaica fiscal deficit dropped by $7.6 billion below budget to end at just $4.2 billion for the first two months of the 2017-18 fiscal year. Unbudgeted inflows of $5.2 billion and reduced expenditure of $1.9 billion versus budget were mostly responsible for the improvement.
The primary surplus projected at $8.2 billion jumped to $15.5 billion with the help of the increased inflows and reduced expenditure.
Corporate taxes accounted for a shortfall of $228 million, PAYE for $568 million tax on interest $272 million, stamp duty $403 million and special consumption taxes on imports $1.1 billion. Categories that out performed are special consumption taxes on local goods $336 million, Education taxes $309 million, GCT on local goods and services $518 million, Custom Duty $348 million, Travel tax $510 million and GCT on imports $376 million.
The collection of PAYE for the two months is running at $8.9 million 30 percent lower than the $12.7 billion the government raked in before the increase in the tax threshold that became effective in July last year for the first tranche. On the other hand, Education tax this year of $4.3 billion, is running 13 percent ahead of the $3.8 billion collected for April and May last year.
Shaw’s tax-take jumps sharply
Minister of Finance Audley Shaw is raking in a big up tick in revenues to August ahead of forecast.
The big increase over 2015, includes very little new taxes imposed in the budget presentation in May, this year. The increase over 2016 fiscal year annualises out at $48 billion and $60 billion when the new taxes are included. Compared to budget, revenues are running at $31 billion ahead of forecast on an annualised basis.
It means that Minister Shaw has fully funded the revenues given up by increasing the PAYE tax threshold, well ahead of the year-end and just around the time the reduced PAYE taxation takes effect to affect tax revenues with August being the first month that the reduced payment would be effected. PAYE enjoyed inflows of $1.9 billion more than planned, bringing in $29 billion to August. In 2015 for the same period, a total of $28.45 was generated from this item.
Collector of Taxes office, Constant Spring, Kingston.
GOJ rakes in taxes hikes capital spend
strong>Grants expected by government was off by $3 billion to October this year but a $6.7 billion jump in tax collection more than made up for shortfall and helped deliver a budget beating performance by $3 billion.
The positives on the revenue front helped to create a smaller deficit than planned by $14 million, an improvement of 44 percent.
With the fiscal year unwinding and the revenue gains, plus cost reduction elsewhere, the Government cut the under spending on the capital front from $6.5 billion at the end of September to $3.5 billion at the end of October. Interest savings keeps on climbing and now stands at $4.6 billion up from $3.4 billion at the end of September and could well end up around $10 billion by March next year. Wages that was underspent by $3.9 billion is down to just $1.6 billion below budget.
At the end of October the fiscal was deficit was $18 billion and the primary surplus $53.77 billion versus $44.3 billion planned.
GOJ rakes in $5b more tax revenues
Government of Jamaica raked in 2.6 percent more tax revenues amounting to $4.9 billion over the $190 billion budgeted to reach $195 billion. Grants fell $3 billion short of budget of $6 billion, and non tax revenues by $800 million resulting in nearly half a billion excess revenue over budget, for the nine months to September.
At the end of the period the fiscal deficit projected, was cut in half, with a deficit of $14 billion. The primary surplus measured in at $51 billion some $11 billion better than planned.
The improved revenues flows came mainly from corporate profit tax of $1.9 billion, SCT on local goods $1 billion, tax on interest $2.6 billion, GCT and SCT on imports of $2 billion. PAYE was off by $474 million, telephone tax $400 million, custom duty $800 million and bauxite levy $500 million.
On the expenditure side, recurrent payments are down by $7.3 billion fueled mainly by $3.4 billion reduction in interest payments and $3.9 million in wages. Capital expenditure is under spent by $6.5 billion.
GOJ intake ahead for January
The government of Jamaica enjoyed increased inflows into their coffers in January, bringing the total to $34.4 billion, $1.4 billion more than the $33.2 billion projected. The major area contributing to the improvement is tax on interest delivering $1.2 billion more than forecast.
The intake took the 10 months revenues to $322 billion down by $8.6 billion, just 2.6 percent short of estimates. The major contributors to the year to date shortage is corporate taxes, down $7 billion and production and consumption taxes on local goods and services down by $7.3 billion. Out-performing the target set are, PAYE, non-tax revenues and taxes on interest.
Payments are down, with capital spend coming in at $10.3 billion below projection, interest cost is $5.6 billion lower than originally projected due no doubt to lower interest rates, wages spend is $2.6 billion less than forecast and other expenditure is up by $3.3 billion. The fiscal deficit came in at $6.5 billion ahead of target and the primary surplus at $76 billion is just slightly ahead of target.
The data suggests that the fiscal deficit originally projected at $11.4 billion is likely to end at less than $4.5 billion for the fiscal year.
PAYE gains can’t cover corporate shortfall
PAYE collections, outperformed forecast for September, by $620 million and $677 million, for the six months to September, this year, but that was inadequate to cover the $2.5 billion drop in corporate taxes, in the latest month, for government of Jamaica revenues.
At the end of August, corporations paid over $6.63 billion versus a projection for $8.8 billion, resulting in a shortfall of $2.18 billion, by the end of September, what should have been collections of $15.3 billion turned up to be only $10.65 billion, $4.7 billion short, resulting in a $2.5 billion shortfall, in the latest month alone. The underperformance for company tax collection, was the main reason why the revenue forecast of $156.5 billion for the six months period, suffered an increased shortage of $1.4 billion in tax revenues, bringing the year to date shortfall, to $7.33 billion. Overall revenue shortage, amounted to $7.13 billion, as grants fell short by $337 million in September, but non tax revenues outperformed forecast, by $400 million for the month.
Expenditure| Payment for expenses is well below target, as capital expenditure almost crawled to a halt in September, with only $590 million spent, raising the underspending for the year to date to $7.8 billion, up from $5.38 billion at the end of August. Programmes saw savings in payments of nearly $900 million, in the month, and wages and salaries was $350 million more, in the month, than planned, but there is still a reduction year to date, in this area.
At the end of September, the fiscal deficit of $18.95 billion was ahead of target by $6.3 billion, as the capital programmes have once more taken the bulk of the hit, as revenues fall short of target.
GOJ Tax revenues on target
Jamaican government’s tax revenues, were on target for the first 4 months of the 2014/15 fiscal year, coming in just $611 million short of the target of $112.23 billion.
Only $609 million was collected in grants, as this category fell nearly $3 billion short of target. Overall, total collections, amounted to $121.8 billion, short by $2.6 billion for the period. For the similar period in 2013 inflows amounted to $118.7 billion.
Expenditure fell by a much larger amount than inflows, at $7.7 billion to end at $139.7 billion. Lesser amounts than budgeted were paid out for wages, interest, general and capital expenditures. Government only paid $7.8 billion on the capital side, versus $12 billion budgeted. Reductions of payments were, $737 million for general expenses, wages $1.2 billion and interest $1.6 billion.
The fiscal deficit, improved by $5 billion over target, to reach $18 billion, while the primary surplus was $3.6 billion better than planned. At the same time last year, the deficit was only $5.7 billion and the primary surplus $25 billion or $4.7 billion ahead of target.
Jamaican Government revenues short $3.5b
A $2.5 billion shortfall in the collection of company tax and a $2 billion shortfall in the collection of grants, offset by some areas that over performed, resulted in the overall tax take for the first 3 months of the 2014/15 fiscal year to June, falling short of budget by $3.5 billion revenues.
On the expenditure side, reduced payments of $2.3 billion for non-wages and interest and a billion less in the wage bill, coupled with a $3 billion reduced capital spend, helped to cut expenditure by $6.3 billion, leaving the fiscal deficit better off by $2.8 billion.
Revenues came in at $93 billion for the three months and expenditure at $110 billion, for an overall fiscal deficit of $17 billion.
Areas of revenues that were major out performers are, PAYE with $578 million or 3.6 percent, tax on dividends, $100 million or 24 percent, tax on interest, $726 million or 255 percent, special consumption tax on local goods $737 million or 27 percent, education tax, $231 million an increase of 5 percent.
Local GCT fell sort by 5.5 percent amounting to $792 million, GCT on imports fell short by 5 percent or $723 million.
