Camilo Thame, Business Reporter

The Constant Spring Road Tax Collectorate in Kingston. Tax revenue collections were up in October, earning the treasury more than $14 billion. - File

Delayed capital spending for the first half of the fiscal year running to next year March finally caught up with the central government during October when public finance officials forked out $3 billion more than programmed, reducing the impact of the 26 per cent increase in revenues for the month, but nearly wiping out the gains made in the first six months from lower spending.

The fiscal deficit for the seven months to October 31 was $25.3 billion, or still $1.1 billion lower than expected.

But higher than projected capital expenditure for the month under review dragged down the gap between the actual deficit for the seven months and the budgeted outturn from the $4.4 billion buffer created during the period April 1 to September 30.

Overall expenditure

Overall expenditure during the month was $24.4 billion which was $7.8 billion, or 47 per cent higher than the same month last year and 17 per cent higher than budgeted. Although the increase largely reflected the higher capital expenditure, interest costs of $9 billion was 21 per cent higher than the same month last year and five per cent higher than budgeted.

Programmes, wages and salaries combined cost the government $10.1 billion during the month, which was 20 per cent more during the month under review than the corresponding month last year and four per cent higher than programmed.

Revenue and grants was 26 per cent higher than last year, largely reflecting the 35 per cent increase in tax revenue from $10.6 billion last year October to $14.3 billion during the period under review.

Strongest earners

Government's two strongest earners, general consumption tax (GCT) and personal income tax (PAYE), saw increases of 29 per cent and 44 per cent respectively and, combined, earned $8.4 billion, or 59 per cent of tax revenue.

All other major tax income streams registered increases. But government intake from corporate tax of $240 million during October was 13 per cent lower year on year and 54 per cent lower than budget, while travel tax of $125 million fell by 15 per cent and was 11 per cent lower than budget running counter to the Planning Institute of Jamaica's estimate that tourist arrivals during the month was 23 per cent higher than the comparative period last year.

The only other tax earner to show decline was tax on profits made by bauxite and alumina companies, which fell by 14 per cent to $39 million and was 80 per cent lower than budget.

The sector has seen a falloff in output of alumina production, which was flat during the July to September quarter when all four refineries across the island churned out one million tonnes of alumina.

But the flat performance placed against higher energy cost and a fixed selling price translated into lower than expected profit.

camilo.thame@gleanerjm.com