The Government of National Unity has created a new policy not to include measures within the annual fiscal budget that have not yet reached the stage of creating revenues, following the approval of a second Schedules of Additional Provisions (SAP) this year, in the amount of $9,633,684.
Premier and Minister of Finance Dr. the Honourable Natalio Wheatley made the announcement in the House of Assembly on Tuesday, following the passing of the SAP through the Committee Stage with amendments.
He said the SAP will consist of a Recurrent Expenditure of $7,108,284, which includes the sum of $1,800,600 from the Reserve Fund and $1,926,100 from the Miscellaneous Purposes Fund to be charged against the Consolidated Fund of the territory.
Another $781,900 will be pumped into the Capital Acquisition Expenditure, to be charged against the Development Fund of the territory by way of funds transferred from the Consolidated Fund.
An additional $1,743,500 will be allocated to the Capital Expenditure, which includes the sum of $12,000 from the Miscellaneous Purposes Fund to be expended in variation of the appropriated amount.
2022 budget included revenue from initiatives that are not yet on stream
Premier Wheatley noted that for the 2022 Fiscal Year, the House of Assembly approved revenue estimates of $356,653,431, which was 4.8 percent or $16.3 million higher than the 2021 figure of $340,389,909.
He said some of the budgeted revenue streams included a number of initiatives that were yet to materialize, a practice that will no longer occur, following the passing of the new policy.
“Expected collections from revenue initiatives such as gaming and gambling, asset minding and medicinal marijuana were included in this budget but these initiatives are not ready to deliver revenues,” he stated.
“We have made a policy decision moving forward not to include any measures in the budget which have not realistically gotten to the point where revenues will be realised within a short period of time. We have also had to make adjustments due to the relief package, offering a temporary reduction in import duties, which was done to ease the plight of our population, due the shocks of the COVID-19 global pandemic,” he added.
Revenue streams were still trending upwards
The premier noted that despite the deduction of these revenue estimates, collections were trending slightly above budget expectations, which he now estimated at $352,106,535.
He said, “This was attributed to the successful reopening of our tourism economy following the pandemic period, the increase of economic activity in our local business community, stamp duty from land sales and a steady inflow of revenue from the financial services industry. The economy has commenced its road to recovery. Recovery which will not happen overnight as is the case with most economies throughout the world.”
BVI also experienced an increase in expenditure
The leader of government business also noted that while the territory’s revenue was trending in the green, its expenditure exceeded the initial budgeted amount, due to a number of factors.
“While there is an uptick in revenue, there’s also increased expenditure, due to the resources needed to manage the territory’s waste collection and disposal, the influx of illegal immigrants and detainees, funds transferred to the National Health Insurance to prevent the collapse of the scheme, the cost of reform, the increase of fuel prices, and the intended subsidy to assist residents with a reduction in the electricity bill due to the increase in global fuel prices,” Dr. Wheatley stated.
“Additionally, the Social Assistance Programme facilitated by the Social Development Department was increased by approximately $1,301,000. This increase is partially funded by the transfer of funds from the $396,893 and the repurposing of the Ministry of Health Income Support Programme in the amount of $485,883,” he further explained.
The premier said that his government will be tighter on its spending for the rest of the year, adding that constant monitoring of the territory’s financial revenue will have to continue in light of the ongoing global events which will have an impact on the territory.