Central Gov’t expenditure to reach $366.9B in 2021
–tax revenue pegged at $257B
Central Government’s total expenditure for 2021 is expected to reach some $366.9 billion, 12.7 per cent more than the $325.5 billion spent in 2020.
This sum would be driven mainly by an anticipated increase in spending for an intensified Public Sector Investment Programme (PSIP).
This was disclosed Friday by Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh, during his 2021 National Budget presentation.
Government’s non-interest expenditure is targeted at $256.7 billion, 6.2 per cent above the amount spent in 2020. This, the Finance Minister said, will be driven by growth in transfer payments and employment costs of $9.1 billion and $7.7 billion, respectively.
Meanwhile, Government’s revenue for 2021 is estimated at $257.9 billion, 13.4 per cent or $30.5 billion more than the 2020 collections.
Data show tax revenue collections are projected to grow by $23.8 billion, reaching $242.1 billion in 2021, while non-tax revenues will expand by $6.8 billion, to an estimated $15.8 billion.
Dr. Singh said the 2021 tax revenue outlook is based on an anticipated 8.4 per cent increase in income taxes, as a result of intensified activity in the private sector.
Withholding tax which is largely driven by remittances from companies involved in the extraction of crude oil is expected to grow by 13.9 per cent or $4.6 billion above 2020 collections. Expansion is also expected from collections of customs and trade taxes, which are anticipated to grow by $3.3 billion to $24.6 billion in 2021, the national budget showed.
Dr Singh said the collections from excise taxes and value-added tax are targeted at $40.1 billion and $53.6 billion, respectively. Non-tax revenues are estimated to grow by 74.7 per cent in 2021 on account of higher collections of royalties, special transfers and Bank of Guyana profits.
The Finance Minister explained that the higher anticipated transfer payments are largely due to a significant increase of $2.6 billion allocated for educational grants to nursery, primary and secondary students across the country.
Additionally, subsidies and contributions to local organisations as well as old age pension and social assistance are expected to increase by $3.1 billion and $1.2 billion to $57.6 billion and $23.6 billion, respectively. Capital expenditure is projected to expand to $103.2 billion, 35.6 per cent, or $27.1 billion, above the amount expended in 2020.
This, Dr Singh said, is attributed to advancement of major infrastructure projects.
The overall deficit of the Central Government is projected to be 8.7 per cent of GDP, compared with 9.4 per cent at the end of 2020.