The fiscal situation of the central government for the first quarter of the year 2008 (January 1st to March 31st) has improved, in comparison to the same period for the year 2007.{{more}}

A release from the office of the Prime Minister said that on the current account, revenue increased by 24.9 per cent, surpassing the growth in current spending which went up by 18.2 per cent. As a result, the central government realized a surplus on the Recurrent Account of $1.58 million, up from a deficit of $3.8 million for the comparable period last year. The overall account also improved, with the overall deficit contracting by 88.4 per cent from $20.66 million to $2.40 million. Total revenue and grants increased by 33.7 percent in the first quarter of 2008, compared to the similar period last year, from $84.21 million to $112.6 million, the release said.

“Taxes on Incomes and Profits grew by 35.4 per cent to $20.93 million. The collection of income taxes increased despite the tax relief measures instituted from January 1, 2008, simply because personal incomes increased significantly. The increased collection from Corporation taxes was mainly the result of increased profits of many of the major private sector companies,” the release signed by Hans King, Press Secretary to the Prime Minister, noted. Taxes on domestic transactions performed well also through the VAT system.

On the current spending side of the government’s accounts, as at March 31, 2008, current expenditure amounted to $103.32 million or an increase of 18.2 per cent over the comparable period last year. Personal emoluments (excluding wages but including salaries in the public service) recorded an increase of 17.3 per cent, reflecting the impact of the 10 per cent salary increase and the reclassification exercise.

Government’s spending on goods and services increased by 32.6 per cent. This was as a consequence of increased spending on maintenance services, utilities, supplies and materials, advertising and promotion. The Government’s outlays on Transfers and Subsidies increased by 35.6 per cent, mainly due to increases in Grants and Contributions, Social Welfare Payments, and Pension Benefits. Capital inflows for the first quarter of 2008 amounted to $7.7 million, up from $0.199 million or an increase of 3761.4 per cent when compared to the similar period last year. Capital spending on the Public Sector Investment Programme for the first quarter of 2008 amounted to $11.67 million.