Economic and Financial Review - June 2019

June 2019 Economic and Financial Review ANTIGUA AND BARBUDA

growth in current expenditure, which outpaced the negligible expansion in current revenue. Current revenue rose by a marginal 0.1 per cent ($0.4m) to $412.2m, reflective of lower tax receipts. Notwithstanding the estimated expansion in economic activity in the review period, tax revenue fell by 1.6 per cent ($5.9m) to $353.4m, primarily associated with lower inflows from taxes on domestic goods and services and international trade and transactions. The reductions in the latter may be reflective of continued tax waivers with respect to import duty and the revenue recovery charge. Specifically, tax receipts on domestic goods and services declined by 7.4 per cent ($12.8m) to $159.4m on account of lower collections from the Antigua and Barbuda Sales Tax (ABST). Receipts from the ABST fell by 13.2 per cent ($20.1m), underscoring some of the continued challenges in tax collection and administration. An advance of 47.1 per cent ($7.1m) in the proceeds from stamp duties partially tempered the decline in this sub-category. Concurrently, collections from taxes on international trade and transactions fell by 0.9 per cent ($1.2m) to $125.6m, reflecting lower inflows from the Revenue Recovery Charge ($1.8m),

import duty ($0.4m) and environmental tax ($0.3m). In contrast, the yield from consumption tax, which is a major component of this tax category, expanded by 8.6 per cent ($2.4m), which was more consistent with the estimated buoyancy in economic activity. The overall decline was further mitigated by a 52.6 per cent ($7.7m) expansion in the yield from taxes on property. This improvement may be attributed to the recent enactment of the updated Tax Administration Procedures Act (TAPA), which involves decisive legal action against non-compliant tax payers. Receipts from taxes on income and profits remained virtually unchanged at $46.0m, relative to the $45.7m recorded in the first six months of the previous year. Meanwhile, non-tax revenue accelerated by 12.0 per cent ($6.3m) to $58.9m, influenced in large part by higher Citizenship by Investment Programme (CIP) receipts, which more than doubled in the review period, relative to the corresponding period in 2018. Current expenditure increased by 4.6 per cent ($19.6m) to $443.3m during the period of review, reflecting higher outlays in three of the major expenditure categories. Personal emoluments, the largest spending

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Eastern Caribbean Central Bank