By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government narrowly missed its full-year deficit target despite key revenue streams such as VAT and real property tax under-shooting projections by 5 percent and 9 percent respectively.

The Ministry of Finance, unveiling the Government's fiscal performance for June and the 2024-2025 full-year, disclosed that VAT collections missed their target by $77.6m as they closed at $1.438bn - a sum representing 94.9 percent of the $1.516bn full-year target. However, the $1.438bn received was some $85m higher than the prior Budget year's collections.

Meanwhile, real property tax revenues came in some $20m below the $230m forecast to account for 91.3 percent of Budget estimates. The $210m collected, though, was slightly higher than the prior year's $203.4m when property tax revenues beat the 2023-2024 Budget's target.

For the 2024-2025 fiscal year, the only revenue source to exceed target was "taxes on international trade and transactions" - largely meaning Customs duties imposed at the border which totalled $871.7m - a sum 5 percent higher than the forecast $830.5m

Total revenues missed Budget forecasts by $147.3m, totalling $3.396bn compared to the projected $3.543bn, to stand at 95.8 percent of target. Total tax revenues were off from target by $116.2m, standing at $3.026bn or 96.3 percent of projected collections which were $3.143bn.

The revenue misses, though, were balanced by the Government's spending coming in 3.8 percent below forecast at $3.475bn compared to $3.613bn projected. Recurrent spending, which covers the Government's fixed costs such as civil service salaries and rents, was almost $80m less than forecast at $3.189bn compared to Budget forecasts of $3.269bn.

Meanwhile, the Ministry of Finance's report revealed that the Governments outstanding debt decreased by almost $361m in June as it received the proceeds from its $1.067bn foreign currency external bond issue. Some $767m of this sum was used to refinance, rollover and replace existing debt.

"During June 2025, central Government’s outstanding debt decreased by an estimated $360.9m," the Ministry of Finance added. "Proceeds of borrowings totalled $1.746bn, primarily derived from foreign currency sources (80.6 percent) and the remaining in Bahamian dollars (19.4 percent).

"Of the $2.107bn in debt repayment, 70.6 percent was mainly linked to foreign currency obligations which included $767.4m in Eurobond repurchases." A net $294.8m in Bahamian dollar advances from the Central Bank was also repaid, along with a net $246.8m in domestic bonds. Some $261m in new Treasury Bills and notes was also issued, while there was a net $345.9m repayment of foreign currency bank loans.

As for the Government's fiscal performance in June 2025, the Ministry of Finance added: "Preliminary data for June 2025 indicates a notable improvement in the Government’s fiscal position to a surplus of $25.4m from a deficit of $35.8m in June 2024.

"This positive outcome was driven by a $74.4m (31.6 percent) year-over-year increase in total revenue to $310m, which offset a $13.2m (4.9 percent) rise in total expenditure to $284.6m. Based on the June fiscal outturn, the full-year 2024-2025 deficit represented an estimated 0.5 percent of GDP, remaining within the targeted range of 0.3 to 0.7 percent of GDP."

On the revenue front, the Ministry of Finance added: "Tax revenue grew by $58.8m (28.7 percent) to $263.3m, underpinned by taxes on international trade and transactions advancing by $29.9m (43 percent) to $99.5m, benefiting from enhanced enforcement measures on export duties.

"VAT receipts rose by $13.8m (13.9percent) to $113m due to improvements in collections related to realty, Customs and other goods and services. Taxes on the use of goods and permissions increased by $8.3m (52 percent), driven by revenue gains from communication levies. Non-tax revenue strengthened by $16.2m (52.9 percent) to $46.7m, largely attributed to higher receipts from property income and dividends."

Turning to government spending, the Ministry of Finance added: "Recurrent spending for the review month amounted to $268.7m, a gain of $22.4m (9.1 percent) from the corresponding period in the prior year.

"Outlays for the use of goods and services expanded by $27.3m (79.2 percent) to $61.8m, primarily linked to timing differences in payments for communication expenses. Personal emoluments increased by $14.1m (18.9percent) to $89.1m, reflecting payments of allowances and NIB contributions.

"Public debt interest payments were higher by $18.6m (33.4 percent) at $74.5m, consistent with growth in the Government’s overall liabilities. Capital expenditures contracted by $9.1m (36.3 percent) to $15.9m. The bulk was expended for the acquisition of non-financial assets (59.8 percent), and the remaining 40.2 percent represented capital transfers."