Opposition questions implications of revenue shortfall on budget

By Clinton McGregor 

 

The parliamentary opposition has called for the Minister of Finance to fully disclose to the country, the implications of the revenue shortfalls on the budget for the current fiscal year.

 

Finance Minister Dr. Nigel Clarke on Tuesday disclosed the shortfall of $22 billionin revenue and admitted that this is a setback to the government's fiscal target.

 

According to Dr. Clarke, the main contributor to the shortfall was Corporate Income Tax, which was $14.3 billion lower than programmed for the fiscal year.

 

He added that several entities and individuals who filed, did not make the indicated tax payments within the required timeline.

 

Dr. Clarke said the government will be pursing payment related to these returns via its comprehensive compliance systems.

 

He cited other factors, including changes to the International Financial Reporting Standards (IFRS) which have resulted in lower taxes being declared by a number of financial institutions.

 

At the consolidated level, the financial sector reported profit levels below that of the prior year and therefore lower taxes were remitted in March 2024.

 

The Finance Minister admitted that the under-performance of revenue in March 2024 has implications for the government's programmed revenue estimates for fiscal year 2024/25.

 

He told Radio Jamaica News that he is awaiting more data from the Tax Administration of Jamaica.

 

"As disclosed in my release yesterday, Tax Administration Jamaica indicated that there were significant instances of tax filings made by entities in March but without payment within the required period of time. Tax Administration Jamaica will therefore be following up. Until that happens it would be premature to announce, with certainty, any definitive adjustments. Suffice to say that the government of Jamaica has options. There are revenue possibilities and expenditure adjustment opportunities that have not yet been factored in," he sought to explain. 

 

But in a statement Wednesday, Opposition Spokesman on Finance Julian Robinson said the Minister needs to tell the country which programmes will be negatively impacted by this revenue shortfall and whether the $25 billion of give backs he announced in March are sustainable.

 

"The Minister must explain whether the achievement of key fiscal targets in the current fiscal year will be compromised. Our call comes against the background of the fact that the Minister has not provided any information on the $25 billion which will come from the securitization of receivables

which was unknown during the budget debate. 

 

"To date, no information is known as to which receivables are being securitized, the rate at which these receivables have been discounted and who we have entered into this agreement with. The opposition is concerned that the shortfall will have a negative impact on many programmes that the government intends to execute during this fiscal year," he contended.