antigua and barbuda fiscal performance january to march 2013

A publication of the Ministry of Finance, the Economy and Pubic Administration

Issued: 4 July 2013 1

The overall fiscal performance improved for the period January to March 2013 compared to the same period in 2012

Total revenue decreased marginally and total expenditure decrease significantly.

Highlights

Review

Qua r t e r l y

January to March 2013

Government of Antigua and Barbuda

An analysis of revenue performance shows total revenue and grants amounted to $159.8 million, a 3.4% or $5.5 million decrease compared to the first quarter in 2012. The main component of total revenue is current revenue, which fell by 3.3% from $165.0 million in 2012 to $159.6 million for the period under review. The decline in tax revenue is due to a significant decline in revenue from Stamp Duties and the reallocation of the Passenger Facility Charge, Embarkation Tax (in the form of the Airport Administration Charge) and the Cruise Passenger Tax from Central Government to the Airport Authority and the Antigua Pier Group.

Revenue from Stamp Duties amounted to $19.2 million in the first quarter of 2012, reflecting increased activity in the

Revenue Performance real estate sector and, in particular, a major transaction related to the expansion work at the Jumby Bay Resort. In the first quarter of 2013, revenue from Stamp Duties amounted to $5 million, which is 74% less than the same period in 2012. On the other hand, the ABST remained relatively flat at about $53 million while revenue from Property Tax declined by about 1% from $4.8 million in the first quarter of 2012 to $4.7 million in 2013 .

There was a 170.8% increase in revenue from the Corporate Income Tax from $6.5 million in the first quarter of 2012 to $17.6 million in the first quarter of 2013. This increase was a result of the Inland Revenue Department’s efforts to collect Corporate Income Tax arrears. The Customs and Excise Department also collected arrears of about $10 million in respect of the Oil Import Levy, which resulted in a 100% increase in revenue from this source compared to 2012.

Likewise the Personal Income Tax, Import Duty and Revenue Recovery Charge continue to be buoyant. Revenue from the Personal Income Tax increased by 18% from $9.8 million in the first quarter of 2012 to $11.6 million over the same period in 2013. Further, the Import Duty grew by 4.3% from $18.5 million in first quarter of 2012 to $19.3 million over the same period in 2013 while the Revenue Recovery Charge increased slightly to $16.5 million in the first quarter of 2013.

Overall, the falloff in revenue from the Stamp Duties was more than offset by the increased revenue generated

23.9

132.1

8.9

34.1

118.4

7.0

Direct Tax Revenue Indirect Tax Revenue Non‐Tax Revenue

Chart 1: Comparison of Recurrent Revenue (EC$m)

Jan ‐Mar 2012 Jan ‐Mar 2013



Expenditure Performance

Total expenditure decreased by 23.8% or $ 41.1 million from $172.6 million for the period January to March 2012 to $131.5 million for the same period in 2013.

Primary expenditure, which comprises primary current expenditure and capital expenditure, was reduced by 24.0% or $36.1 million from $150.4 million in 2012 to $114.3 million in 2013. Moreover, primary current expenditure, which includes wages and salaries, goods and services, pension, and other transfers declined by $35.3 million from $148.3 million at the end of the first quarter of 2012 to $113.0 million at the end of the first quarter 2013. The main contributor to the decline in primary current expenditure is spending on other transfers, which fell by 64.4 % from $30.3 million in 2012 to $10.8 million at the end of the first quarter 2013. This is largely a result of the timing of transfer payments to statutory corporations.

There were decreases in other components of primary current expenditure. Wages and salaries fell by 1.6% from $66.8 million at the end of the first quarter of 2012

Recurrent revenue decreased by $5.6m (3.4%) and primary current expenditure

decreased by $35.3m (23.8%) for the period January

to March 2013

to $65.7 million at the end of first quarter of 2013. Expenditure on goods and services fell by 30.1% from $23.6 million in 2012 to $16.5 million in 2013. The significant reduction in expenditure in the first quarter of 2013 compared to the same period in 2012 was a result of the Government’s efforts to curtail expenditure in light of lower than budgeted revenue performance. Also, the fact that the budget for 2013 was passed in late January 2013 meant that the Ministries did not have access to much of their budgetary allocations until February 2013.

165.0 150.3

159.5

114.3

Total Recurrent Revenue Total Recurrent Expenditure

Chart 3: Revenue and Expenditure Comparison (EC$m)


66.8

23.6

2.1

57.8 65.7

16.5

1.3

30.8

Salaries and Wages

Goods and Services

Capital Expenditure

Transfers and Grants

Chart 2: Recurrent Expenditure (EC$m)

Jan ‐Mar 2012 Jan ‐ Mar 2013



The overall fiscal performance for the period January to March 2013 improved by 501.8% from a deficit of $7.0 million in 2012 to a surplus of $28.4 million in 2013.

The primary balance also improved by 200.7% from a surplus of $15.2 million in 2012 to a surplus of $45.7 million in 2013. This significant improvement indicates that the Government was able to allocate about $28 million of revenues generated to cover some of its debt obligations, including interest payments, debt amortization, and the repayment of non-debt domestic arrears (which includes unpaid balances due to local contractors and suppliers).

Overall Fiscal Performance

Turning to Public Debt, the total interest payments on Government’s Public Sector Debt (which includes the central government and government guaranteed debts) amounted to $26 million for the period January to March 2013. Over the same period in 2012, total interest payments on Government public Sector debt were $24.8 million.

Of the $26 million in interest payments made in 2013, $17.2 million or 66.2% represents Central Government payments and $8.8 million or 33.8% represents interest payments on Government guaranteed debt. Of the $17.2 million in interest payments on Central Government debt, $12.4 million or 72.1% was paid to domestic creditors while $4.9 million or 27.9% was paid to external creditors. This compares to interest payments of $12.2 million on domestic debt and $3.6 million on external debt in 2012.

Revenue Performance cont’d

(7.1)

28.3


Chart 5: Comparison ofOverall Balance (EC$m)

from sources such as the Corporate Income Tax, Personal Income Tax, and Import Duty. However, the total collection for the first quarter in 2013 was less than collections for the same period in 2012 due to the absence of revenue from the Passenger Facility Charge, Embarkation Tax, and the Cruise Passenger Tax. These taxes generated about $15 million in the first quarter of 2012.

Public Debt

Total interest payments were 4.7% higher in 2013 when compared to the same period in 2012. This was mainly driven by a 36% increase in external interest payments. The growth in external interest payments can be attributed primarily to the regular servicing of Bilateral Paris Club debt, Bilateral Non-Paris Club debt, and multilateral debt, especially to the Caribbean Development Bank.

The total debt stock, which includes central government and government guaranteed debt balances and arrears, declined by 1.1% from $2.83 billion at the end of the first quarter of 2012 to $2.8 billion for the same period in 2013.

15.8

26.0

Dec 2012 Jan to Mar 2013p

Chart 4: Debt Interest Payments (EC$m)



Central government refers to the activities of the Government excluding those for statutory bodies. Transactions at this level reflect the legal budget of the central government. Current account balance is the difference between recurrent revenue and recurrent expenditure. Overall Balance: On a cash basis, total incomings and outgoings from the budget must always balance. The overall balance is the difference between the total revenue and grants and total expenditure. The primary balance excludes interest payments from expenditure. It can be said to provide an indicator of current fiscal effort, since interest payments are predetermined by the size of previous deficits.

Explanatory Notes

Table 2: Economic Classification of

Government FinancesJan ‐ Mar

2012

Jan ‐ Mar

2013

$ change % change

TOTAL REVENUE AND GRANTS 165.5 159.8 (5.8) (3.5)

Total Recurrent Revenue 165.0 159.5 (5.5) (3.4)

Direct Tax Revenue 23.9 34.1 10.2 42.5

Indirect Tax Revenue 132.1 118.4 (13.7) (10.4)

of which:

ABST (gross ) 53.2 53.0 (0.2) (0.4)

Stamp Duty 19.2 5.0 (14.1) (73.8)

Non‐Tax Revenue 8.9 7.0 (2.0) (21.9)

Total Capital Revenue 0.5 0.3 (0.2) (44.2)

Grants and Contributions 0.0 0.0 0.0 0.0

Capita l Revenue from Sale of Assets 0.5 0.3 (0.2) (44.2)

TOTAL EXPENDITURE 172.6 131.5 (41.1) (23.8)

Primary Expenditure 150.3 114.3 (36.1) (24.0)

Salaries and Wages 66.8 65.7 (1.1) (1.6)

Goods and Services 23.6 16.5 (7.1) (30.3)

of which:

Rent 7.2 7.6 0.4 5.6

Travel 0.8 0.5 (0.2) (32.5)

Transfers and Grants 57.8 30.8 (27.0) (46.7)

of which: Pens ions and gratui ties 20.9 13.6 (7.4) (35.2)

Total Capita l Expenditure 2.1 1.3 (0.8) (38.6)

Publ ic Debt Servicing 22.2 17.3 (5.0) (22.5)

External Interest 5.9 4.9 (1.1) (17.7)

Domestic Interest 16.3 12.4 (3.9) (24.2)

CURRENT ACCOUNT BALANCE (5.5) 29.3 34.7 633.8

PRIMARY BALANCE 15.2 45.5 30.3 199.9

OVERALL BALANCE (7.1) 28.3 35.3 499.8

Jan to Mar 2013 / Jan to

Mar 2012

For further information, please contact: Office of the Financial Secretary Tel: (268) 462 4860/61 Fax: (268) 462 1622 Email: [email protected] Visit the Government website for more information www.antigua.gov.ag

antigua and barbuda fiscal performance january to march 2013

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