Special Consumption taxes

April taxes indicate strong economic rebound

The government of Jamaica’s revenues surged an astounding 105 percent in April, this year over inflows over 2020 and an impressive 65 percent higher than inflows for April 2019 and suggest that the local economy is on a strong rebound if the April performance continues.

Corporate taxes outperformed budget by 39% for April 2021

The 2021 inflows amounted to $75 billion and exceeded the forecast of $72 billion by $3.4 billion and are the highest monthly inflows for the past three years except for the months of March.
In April 2019, the Government of Jamaica collected just over $46 billion in revenues and a mere $37 billion in 2020, the latter being after the economy took a major body blow in March that year, the start of the Covid-19 pandemic and the closing of the country’s borders that effectively looked down the tourist industry.
Taxes collected from Income and profits delivered $1.1 billion more than budget in April, with all categories performing above budget. The production and consumption category delivered a $1 billion increase and Production and consumption taxes contributed $1.3 billion more in revenues.
Corporate taxes jumped 32 percent to $1.4 billion, a lot better than the $903 million collected in 2019 and $1.08 in April 2020. PAYEE is up 6 percent or $373 million on a budget of $5.9 billion but is up 13 percent over the 2020 intake of $5.54 billion. Taxes on interest rose a strong 20 percent over budget to $1.7 billion. Special Consumption Taxes on local goods spiked nearly 9 percent to $3.6 billion, education taxes outperformed budget by 8 percent to reach $2.6 billion and GCT on local goods and services was up just 3 percent to $7.7 billion, but that is still well below inflows of $9 billion April 2019 when the GCT rate was 10 percent higher than the current rate of 15 percent.

Jamaica’s Ministry of Finance newest office building

Customs duty ran 13.7 percent ahead of forecast at $3.3 billion and remained below inflows of $3.5 billion in April 2019, but higher than the $2.6 billion collected in 2020. GCT on imports is up 8.5 percent above budget to hit $6.9 billion and much better than the $5.3 billion last year. Special Consumption Tax on imports outperformed the budget by 5.6 percent to reach $3.3 billion and betters last year’s intake of $3 billion. Travel tax is up a stunning $34.4 percent above forecast to end at $621 million but well off the nearly $2 billion earned in April 2019 and $1 billion last year.
April 2021, performance is just slightly below the record inflows of $85 billion reached in March this year, as well as the $82 billion outturn for March 2020 and March 2019, with $84 billion.
The magnitude of this year’s performance can be measured with the 2020 fiscal year when the economy was operating at full capacity compared to April 2020. The highest inflows in that year were in June with $60 billion, September $63 billion and December $64 billion.

38% more taxes by Jamaican businesses

Increased taxes pushed inflation in April.

Jamaica’ business sector paid 39 percent more taxes to government than projected, for the year to September, with $23 billion collected in corporation taxes resulting from a $6.5 billion increase ahead of forecast.
For the 2017 fiscal year, $16.4 billion was raked in, to September while $52 billion in corporate taxes was paid by the business sector for the full twelve months. Special Consumption taxes on local goods rose 50 percent above forecast with a $5 billion increase while local GCT grew 6 percent or $2.6 billion and travel tax jumped 26 percent or $2 billion above the amounts budgeted earlier in the year. Tax on interest fell $2 billion below forecast to $5 billion and was the only major area of underperformance

Jamaica’s Ministry of Finance newest office building

Revenues for the government of Jamaica continues to outperform forecast with inflows rising $15 billion more than the amount projected, bringing the half year take to $262 billion.
Expenditure underperform projections by $3 billion as interest cost fell $2 billion and the wage bill fell $1 billion.
Government operations ran at a deficit of just $620 million in September, but for the year to date, a surplus of $5 billion. Interestingly, the capital expenditure that have struggled to keep pace with forecast, is down by just $144 million with $18.3 million having been spent. The primary surplus, one of the major target under the IMF agreement, came in at $62 billion or $17 billion better than planned.