Government revenue exceeded expectations in the first quarter of the 2025–2026 financial year, defying the anticipated impacts of a reduced Value Added Tax (VAT) rate, which dropped from 15 percent to 12.5 percent. The Ministry of Finance’s Provisional First Quarter Fiscal Performance Report for 2025-2026 revealed that total revenue reached $1.12 billion, surpassing forecasts by approximately seven percent and showing a nearly three percent increase compared to the same period last year.
The positive fiscal performance is largely attributed to robust tax collection, amounting to $884.2 million. This figure was bolstered by higher-than-expected collections in key areas, including corporate tax, departure tax, withholding taxes, and excise duties. Furthermore, non-tax revenue saw a significant rise of over 16 percent when compared to the previous year.
While VAT collections were lower year-on-year due to the rate cut, they still outperformed initial forecasts for the quarter. This outcome underscores a trend of resilient consumer spending in the economy. The Ministry of Finance noted that the strong revenue performance indicates ongoing economic momentum and enhanced compliance across various tax categories.
This favorable economic outlook is a positive sign for the fiscal landscape, indicating that proactive measures are yielding results and contributing to a healthier treasury. The improved revenue collections not only enhance government capabilities to fund essential services but also suggest a growing consumer confidence in the economy.