Dominica’s Prime Minister and Minister of Finance Roosevelt Skerrit presented a record 1.3-billion-dollar budget to the Dominica parliament.
According to the Dominican leader, the 2022/2023 budget is predicated on four pillars.
BUDGET PROPOSAL FOR 2022/2023
Mr. Speaker, the budget proposal for the Fiscal Year 2022/2023 is predicated on four pillars: (1) fiscal resilience and consolidation, (2) investments for resilience, growth, and sustainable development, (3) citizen’s well-being, and (4) and partnerships for resilience and sustainable growth.
PILLAR 1 FISCAL RESILIENCE AND CONSOLIDATION
Mr. Speaker, the estimates of revenue and expenditure which I will present shortly, consider the need to continue our fiscal consolidation and financial resilience efforts. Our fiscal consolidation plan includes focusing on expenditure efficiency and increasing tax collections. We have recently put in place robust frameworks including new public procurement legislation and fiscal rules to support expenditure efficiency.
To support our financial resilience programme, we have developed a disaster risk financing strategy and new disaster financing instruments, including the Vulnerability Risk and Resilience Fund with savings now at $11.0 million. On the revenue side, we intend to strengthen tax administration, including taxpayer education, collection of arrears, and auditing of tax returns to ensure accurate reporting as a means of increasing revenue collection.
During this Fiscal Year, we will also earmark a percentage of Citizenship-by-Investment (CBI) revenue for debt repayment. The outlook for the Fiscal Year 2022/2023, suggests a slight improvement in the Government’s fiscal position with the primary deficit moving to 4.7 percent of GDP owing to expected increases in revenue. 19 We are in the process of finalizing the Medium-Term Debt Strategy for the three-year period 2022 to 2025, and the Debt Portfolio Review for 2021 is on schedule to be completed and published by September 30, 2022.
Beginning this Fiscal Year, in order to improve management, governance, accountability, and transparency, Government will implement a new reporting and monitoring system for State Owned Enterprises (SOEs). They will be mandated to submit quarterly, and annual financial reports based on approved standards. These reports will be reviewed by a Monitoring and Oversight Committee which will report its findings to the Cabinet. Estimates of Revenue and Expenditure for the Fiscal Year 2022/2023 Total revenues are estimated at $1.13 billion and consist of the following: • recurrent revenue in the amount of $896.2 million; • local capital revenue totaling $5.1 million; • receipts from loans in the amount of $77.1 million; • grant resources in the sum of $155.17 million; the Fiscal Year 2022/23 will see a drastic increase in total expenditure reflecting the implementation of a transformative capital programme.
Total expenditure is estimated at $1.2 billion. Of this amount, $650.0 million is earmarked for recurrent expenditure (inclusive of debt amortization and interest) while $566.4 million will be allocated to capital expenses. Recurrent Revenue in the Fiscal Year 2022/2023, non-tax revenue is estimated at $513.8 million or 57.3 percent of the total recurrent revenue.
This is predominantly receipts from the Citizenship by Investment Programme. Mr. Speaker, despite the exogenous shocks affecting the global market the programme has withstood all adversities and continues to provide an avenue for sustainable development and resilience building. Mr. Speaker had this Administration not restructured the CBI, our citizens would have had to shoulder a much heavier tax burden and many of the 20 development programmes which have taken this country forward so rapidly, could not have otherwise been put in place. Total tax revenue is forecast at $382.5 million or 43 percent of total revenue with Value Added Tax contributing $161.9 million.
Mr. Speaker, the sums of $87.2 million and $66.4 million are expected to come from taxes on international trade and transactions and taxes on other domestic goods and services respectively. Personal Income Tax and Corporate Tax will collectively contribute 6.5% to the total recurrent revenue, while taxes on property amounts to $8.9 million.
Reduction of VAT on Electricity Mr. Speaker, the rising price of fuel, has caused our electricity bills to increase sharply since January 2022. Whilst Government is not able to remove all the VAT charged on electricity, effective August 1, 2022, we will increase the number of VAT-free units from 100Kwh to 150 kWh of electrical energy provided by DOMLEC to domestic consumers per billing period. Mr. Speaker, currently, I have been advised that this measure will benefit the 14,534 domestic customers whose consumptions are currently above 100 units. In addition to this Mr. Speaker, effective August 1, 2022, there will be NO VAT on fuel surcharge charged on DOMLEC Bills.
This means Mr. Speaker, the VAT on fuel surcharge on DOMLEC electricity services will be zero-rated from August 1, 2022. This complete removal of VAT on fuel surcharge on electricity bills will apply to all categories of consumers, namely, domestic, commercial, industrial, Government and hotels. Mr. Speaker, this measure will assist all DOMLEC’s customers except those who are already receiving the VAT-free service. DOMLEC is working on recommissioning the PADU Hydro Plant which has been out of operation since Hurricane Maria. It is expected that this plant will be operational by November 2022. This will provide further relief by reducing the amount of diesel-generated electricity and thereby reducing the fuel surcharge.
According to Skerrit, in the current global climate, many governments are increasing taxes, or asking their citizens to carry greater burdens. However, his Labour Government “is not taking money from our people, we are putting money in people’s pockets. We are placing confidence in and investing in the people of Dominica. In turn, we ask only for your best effort, your kindness and courtesy toward each other, and for your support and cooperation in the national interest.”
Find attached the full Budget. https://natureisle.news/wp-content/uploads/2022/07/Budget-2022.pdf