Cabinet Notes: The Procurement Act comes into effect on June 1, 2021, when the Tenders Board Act will no longer be the law.
It will require that all contracts, regardless of size, come before the equivalent of the tenders board for approval. The discretion to waive tendering will have come to an end.
Three officials from the Ministry of Finance were asked to provide the Cabinet with an overview of the fiscal and economic performance of the nation-state during year 2020, and to share proposed fiscal strategies in 2021 to lower the level of economic pain which the Covid-19 crisis inflicted.
The Deputy Financial Secretary, the Budget Director and the Debt Manager provided Cabinet with data and graphs showing that the revenue collected in 2020 fell below 2019 levels by approximately $100 million dollars.
Not surprisingly, collections in the first three months of 2020, before the lockdown caused by Covid-19 on March 26, 2020, the revenue collected exceeded the amounts of the same period in 2019 by 18%.
The growth which was predicted by the ECCB for 2020 was 7.5%; however, the impact of Covid-19 has been to cause the economy to shrink. As gross domestic product (GDP) decreases, the debt to GDP ratio rises, causing the number to move from 70.3% up to 99.5%, though borrowings were not increased spectacularly.
Tax collection and compliance were pursued by the government arms charged with that responsibility, such that property taxes moved from $18 million to $31 million; more than 5,000 new properties were brought on to the tax rolls.
The Cabinet made a determination to reduce the amount of discretional waivers; the officials reported that waivers amounted to almost $98 million dollars in the year, and that by reducing waivers, tax collection overall would be positively impacted.
The waivers of duties and taxes on imported/used automobiles has already ceased, and that approach has strengthened collections.
A discussion on the Revenue Recovery Charge (RRC) followed. Collection of revenues from tourism accommodation has also risen as more small properties are identified, primarily air b-n-b properties, and taxes collected from the owners.
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