Government total revenues for this year (October 2008 to September 2009) are projected to decline by $18.9 billion or 38.8 per cent; total public debt and debt servicing are projected to increase.

Total revenues amounted to $37.9 billion, reflecting a decline in tax revenue which comprises 83.3 per cent of total revenue.

This, according to the Review of the Economy, which is due to be tabled in the House of Representatives today. The document should have been laid last Monday with the other budget papers but was delayed because Finance Minister Karen Nunez-Tesheira said it contained errors.

The document points out that Central Government debt service is expected to increase by $2.5 billion to $5.9 billion in fiscal 2008/2009, ’reflecting increases in both domestic and external debt service obligations’.

Domestic debt service is projected to rise by $2.2 billion to $4.5 billion or 76.4 per cent of total debt service. It added that this reflects a ’one-off bullet repayment of $951 million bond (equivalent to US$150 million) which matured in November 2008’.

The Review of the Economy also states that external debt service is anticipated to expand by $352 million to $1.39 billion. It adds that this reflects a final payment of £30 million (equivalent to TT$294.6 million) on a £50 million loan which matured in May 2009.

The external debt is projected to increase by $880.6 million to $10.1 billion. The document said this was largely as a result of the strategic upgrade and expansion of the response platforms for the maritime forces of the country in an attempt to safeguard against regional threats to maritime safety and security, and for the protection of national resources.

This included disbursements towards the acquisition of three offshore patrol vessels (OPV), six fast patrol crafts (FPC) and other aviation assets. The Review added that the cost of construction of the National Academies for the Performing Arts is also included in the External Debt.

By contrast, taxes on income and profit, which is the largest component of tax revenue, is estimated to decrease ’substantially’ by $18 billion or 43.7 per cent to $23 billion. ’This is due primarily to lower than projected tax collections from oil companies as a result of declining energy prices,’ the document said.

Tax revenues from other companies operating in the refining, gas processing and petrochemical industries also declined as a result of overall lower prices from $7.6 billion to $5.1 billion. Unemployment Fund receipts also decreased by $1.2 billion or 63.3 per cent to $723.3 million, the document stated.

It added that tax collections from individuals are also expected to decline by $321 million to $3.9 billion, despite an increase in the number of companies employing persons in the $10,000 to $99,999 per annum income bracket. Similarly, tax receipts from the Green Fund, business levy, health surcharge are also anticipated to fall by $169.2 million.

The document states that taxes on goods and service, the second largest component of tax revenue, is expected to decline by $1.4 billion or 19.2 per cent to $6.2 billion, reflecting decreases in receipts from VAT, motor vehicle taxes and excise duties. It said collections in motor vehicle taxes decreased by 25.9 per cent as a result of a decline in sales of new and foreign used vehicles, while excise duties fell by 2.3 per cent because of production declines in products which attract excise duties.

The document states that receipts from taxes on international trade and stamp duties are expected to decrease by $344 million and $169 million respectively. It noted that receipts from taxes on property and land and buildings, also declined by $10.6 million and $11 million respectively.

It said, however, that non-tax revenue was projected to increase by $1.5 billion to $6.2 billion as profits from non-financial enterprises increase by $1 billion to $1.6 billion, largely as a result of higher dividends from State Enterprises.

On the other hand the gross public sector debt stock is anticipated to increase to $41.7 billion or 31.3 per cent, representing an increase of $848.5 million or 2.1 per cent compared with the previous fiscal year. It added that of the total debt stock, Central Government debt is expected to increase to $25.3 billion or 19 per cent of GDP. Contingent liabilities are projected to decline in absolute terms to $16 billion or an increase from 10.6 per cent of GDP to 12.3 per cent of GDP in fiscal 2008/2009.

The Government said that contingent liabilities, which comprises Government Guaranteed Debt, and letter of comfort, declined by $841 million to $16.4 billion, reflecting an overall decline in letters of comfort of $881.5 million. However, Government guaranteed debt rose by $40.4 million to $12.3 billion, primarily as a result of an increase of $449 million in domestic borrowings by statutory authorities.

The increase recording in the Statutory Authorities Government Guaranteed debt included borrowings by the Water and Sewerage Authority (WASA) in the amount of $300 million for its national social development programme. Government guarantees to the Regional Health Authorities were also issued in the amount of $115 million to meet the operating and strategic objectives of the Ministry of Health, the document stated.