“The activities on the prior actions which are preconditions for the approval and disbursement of the budget support flowed into the second half of the year. And as such, disbursement could not be made for the projected revenue in the first half of the year. Tax on income and wealth is below the expectation with a total of D2.19 billion compared to the mid-year target of D 2.44 billion. The payroll tax performed better than expected at D48.34 million, which is D3.74 million in excess,” he explained.
He also stated that the consolidated GLF revenue had underperformed by 17.91 percent below the end of June budget.
“This underperformance is mainly caused by the non-realisation of budget support which are now expected in the second half of the year, and the weak performance of non-tax component of revenue, which stands at 25.61 percent less than its projection for the period under review,” he said.
He further explained that GLF Expenditure during the review period stands at D9.8 billion, which is 22.45 percent below its mid-year budget of D12.71 billion.
“The cash allocation system that we use dictates that expenditures are met from the revenue generated as far as possible in order to reduce the need to amount of borrowing.’
Hon Keita dilated that capital expenditure is expected to improve in the 2nd half of the year “as we begin to implement the 2nd phase of Bertil Harding Highway project and health infrastructure project and we aim to improve the expenditure budget execution in the second half when the budget support revenues are realised.”
“It is important to highlight that while we have achieved significant milestones in some types of taxes such as tax revenue on international trade and VAT on imports, there are certain sources of revenue that felt short of budget for the first half of year including non-tax revenue and tax on income and wealth,” he noted.
He further highlighted that the budget implementation during the first half of the year remains prudent. “The overall actual revenue budget fell short of the budget by D1.83 billion but this was offset with a lower actual expenditure than budget by D2.854 billion leading to a lower financing requirement than budget of more than D2 billion,” he explained.
“The cash allocation mechanism is an important tool that assisted in the budget implementation process as expenditures were constrained by the revenue generated,” he told legislators.
“Efforts were exerted to realise the prior actions for the budget support which is an important element of the revenue and already significant milestones are realised in the second half the year.”
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