Civil servants ‘will be paid’, gov’t promises

Minister of Information Melford Nicholas (File photo)
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By Kadeem Joseph

[email protected]

Despite recording a major shortfall in revenue for 2020, the government is promising public servants that it will continue to honour its payroll obligations as it seeks to boost tax compliance.

Minister of Information Melford Nicholas gave the assurance during Thursday’s post-Cabinet press briefing, conceding that it will be a test for the government as it seeks to resuscitate the economy.

“This is going to be one of our major challenges in terms of getting tourism back to the level where it once was and to expand the economy in a number of areas,” he said.

“We are satisfied that we are equipped to deal with it and just like we would have managed the public payroll throughout that most troubling period from March of last year until now, we certainly intend to do so going forward.”

Notes from Wednesday’s Cabinet meeting said Ministry of Finance officials had indicated that the revenue collected in 2020 fell below 2019 levels by approximately $100 million dollars.

The economic impacts of the pandemic have subsequently caused the economy to shrink.

“As gross domestic product (GDP) decreases, the debt to GDP ratio rises, causing the number to move from 70.3 percent up to 99.5 percent, though borrowings were not increased spectacularly,” the Cabinet report stated.

While government workers may be able to rest easier with government’s promise, hoteliers may feel even more of a pinch as the administration seeks to reduce the number of discretional tax waivers it issues in a bid to increase revenues.

Minister Nicholas explained that the hotel sector had the greatest impact with respect to these waivers adding, “Hoteliers have over a period of time availed themselves or made requests for consideration of waivers on a number of items that they use in their facilities and so those are the discretionary waivers that will have the most impact.”

According to the Cabinet report, the finance officials said these waivers amounted to almost $98 million dollars for 2020, and that by reducing waivers, tax collection overall would be positively impacted.

But with the future of tourism for 2021 still in flux, the result of such a measure remains to be seen.

However, finance officials also indicated that there was an increase in the amount of property tax collected, with an increase from $18 million to $31 million and more than 5,000 new properties brought on to the tax rolls.

“Collection of revenues from tourism accommodation has also risen as more small properties are identified, primarily Airbnb properties, and taxes collected from the owners,” the Cabinet notes added.

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