Finance Ministry PS: $51b revenue this year

PERMANENT Secretary in the Ministry of Finance Suzette Taylor-Lee Chee said Government expects to receive approximately $51 billion in revenue by the end of the current fiscal year.

She was addressing a spotlight on finance hosted by the ministry at the Hyatt Regency Hotel in Port of Spain on Friday.

Referring to the ministry's financial estimates as of July 5, Lee Chee said there is room for optimism after ten months of actual revenue collection.

"We are confident that revenue this year will be around $51.15 billion. This is about $8 billion more than budgeted. This increased revenue is expected to come almost exclusively from taxes on income and profits, with an additional $4.2 billion from oil companies and $3.8 billion from other companies."

While the ministry budgeted for revenue from income-tax collection to be approximately $6.25 billion, Lee Chee said this figure may now be $5.99 billion.

"This we attribute to the lingering effects of the covid19 pandemic on employment."

The projected increased revenue, she continued, will compensate for this shortfall in revenue from individual income tax.

On Value Added Tax (VAT) refunds, Lee Chee said, "We expect to collect $5.8 billion in VAT refunds by the end of the year, which is significantly lower than the $7.2 billion which we expected at the start of the year."

She attributed this to the fact that Government accelerated the payout of VAT refunds during the year as revenue improved.

Lee Chee said owing to current global energy prices, royalties (from oil and gas companies) are anticipated to exceed the budgeted target by about $500 million.

After noting that oil and gas prices have been volatile in the 2007-2022 period, Lee Chee said, "This year we expect that revenues from oil and gas would comprise about 36 per cent of our revenue, or $18.5 billion."

She added that within the last 15 years, TT had last recorded a fiscal surplus in 2007-2008, when oil and gas prices at that time were approximately US$107 per barrel and US$9.00 per mmbtu respectively.

While Government has estimated its expenditure for this fiscal year at approximately $55.819 billion, Lee Chee said that figure may be lower.

She reminded her audience that last October the original estimate for expenditure in fiscal 2021/2022 was $52.4 billion, and Finance Minister Colm Imbert adjusted that figure to $55.819 billion when he presented the mid-year review in May.

Lee Chee said the ministry estimated that with 11 months of the fiscal year completed, actual expenditure may be approximately $53 billion.

This was attributed to prudent uses of that funding, such as moving unutilised balances under the Infrastructure Development Fund from some projects to others that have more momentum and require additional funding

She said, "These projects are mainly road infrastructure projects under the Ministry of Works and Transport."

Lee Chee estimated that 54 per cent of the expenditure fell under transfers and subsidies, covering matters such as funding for the Tobago House of Assembly, the fuel subsidy and covid19 food-support initiatives.

She said the ministry is optimistic of ending the fiscal year with a deficit of $3.7 billion, as opposed to a projected $9 billion deficit.

The deficit will be financed by approximately $790 million from foreign loans from multilateral sources such as the Andean Development Bank (CAF.)

Lee Chee added, "The remaining balance of the deficit will be met from local sources."