Friday 29 May, 2020

Takeaways from Nevis budget 2019/2020

Premier and Minister of Finance, Nevis Mark Brantley

Source: medium.com

Premier and Minister of Finance, Nevis Mark Brantley Source: medium.com

Premier and Minister of Finance of Nevis Mark Brantley said, “The theme we have chosen is: building resilience, improving infrastructure for long term development and a harmonised approach to economic growth.”  

  • Brownhill Communications closure, “As a result of a downturn in the global economy and changes of the mode of operations by their main client Bell Canada, which forced them to close operations in Nevis.”  Brantley said the government had early discussions with the management of the company and persuaded them to expand benefit payments to workers beyond their obligations based on what is stated in labour laws.   He said the actions taken by the government ensured the affected ex-workers got up to 11-months salaries when coupled with severance payments as they sought employment elsewhere. “My government sought to cushion the impact even more by waiving any and all taxes payable on amounts they received as termination packages ensuring they put maximum money in their pockets.” The government also negotiated with banks for interest-only payments on loans, or delayed loan payments, waiving social security payments for approximately four months and aided with grants for back to school expenses.

 

  • Despite fall-off in revenue collection, Brantley said, the administration was able to pay salaries on time and invest in development of infrastructure such as the school renovation projects, roadwork on the Brown Hill Road, Craddock Road and the Island Main Road, the hospital and treasury building construction did not fall off track in spite of reduced revenue flow.  He said though there was an increase in debt, it was due to new borrowings used to improve infrastructure on the island.

 

  • The continued increase in revenue by three to five per cent annually over the past few years, Brantley said. “Evidence of this objective is observed from the strong growth patterns in our collections over the years, specifically tax revenue in the form of import duties, transfer taxes and value-added taxes (VAT).”

 

  • Maintain and implement social programs to assist the most vulnerable in some communities. Asked for information on programs and communities Brantley told Loop, "This speaks to programs generally across the island. For example, we have programs for at-risk youths where we provide mentoring and training; every senior over 65 living alone gets free electricity and water and every senior pays only EC$1 on public transport; seniors also get free healthcare at our hospital; we provide food vouchers and shelter to the most vulnerable and have built homes for families who because of poverty were not living in sanitary conditions. So we will continue funding these and other programs."

 

  • Total revenue generated as of October 31 amounted to approximately $114.74m an increase of $2.2m or 1.96 per cent when compared to the same period in 2018 where the revenue generated was $112.54m.

 

  • Tax revenue collected as of October 31 amounted to approximate $87.79m representing a growth of 6.07 per cent when compared to the same period in 2018 where the amount was $82.77m.

 

  • He recognised VAT as the most significant contributor to the tax revenue collected for this period. It accounted for approximately 24.57 per cent of the island’s recurrent revenue. Additional contributions included financial services of 8.8 per cent, stamp duty of 8.80 per cent, import duties 8.04 per cent, social services levy 7.77 percent and customs service charge 6.95 per cent. Brantley later recognised VAT which he said touches every sector of the economy, is the largest revenue generator. He said the total VAT generated between January and October 2019 amounted to $28.1m.

 

  • Total expenditure for the period, January to October 2019 amounted to $159.82m representing a marginal increase of 3.55 percent when compared to $154.34m for the same period last year.

 

  • $44.05 for public investments, an increase of 9.21 per cent when compared to $40.34m for the same period last year.

 

  • Total public debt amount of $256.45m at the end of October 2019, an increase of 3.81 per cent when compared to $439.06m at the end of December 2018.

 

  • Brantley said the increase in debt is as a result of new domestic borrowings from the St Christopher and Nevis Social Security Board of 3.5 per year to finance phase one of the island main road project and bridging funds for meeting other obligations.

 

  • Debt stock reduced from external lenders as part of debt strategy from $42.9m in December 2018 to $39.61 as at October 2019.

 

Additional points:

 

  • Maintain a downward trend in borrowing to keep debt at manageable levels

 

  • Seek to reduce the interest rate by four per cent on treasury bills

 

  • Job creation - a method was through boosting the small business sector

 

  • Priorities: Renewable energy, manufacturing, tourism and protection of the environment, small business sector, IT infrastructure for sharing of information between government ministries/ services

 

  • Tourism thrust will include a remodeled Four Seasons Resort and other resorts, maintain overflow of tourists from St Kitts as approximately 6001 tourists from St Kitts visited Nevis in a single visit this year 

 

  • Stronger links to be established with St Martin as a gateway to Nevis

 

  • Construction of a recreational park – construction to begin in the new year, contractors are Taiwanese company

 

  • Greater use of digital media to promote tourism thrust in tourism

 

  • Department of physical planning and environment for collaboration with the Ministry of Tourism for a boosted eco-tourism product

 

 

 

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