Government revenue has surpassed expectations in the first quarter of the 2025–2026 financial year, demonstrating resilience despite the recent reduction in the Value Added Tax (VAT) rate, which decreased from 15 percent to 12.5 percent. According to the Ministry of Finance’s Provisional First Quarter Fiscal Performance Report, total revenue amounted to $1.12 billion, exceeding forecasts by roughly seven percent and reflecting a nearly three percent increase compared to the same quarter last year.
The notable fiscal performance is primarily driven by strong tax collection, which totaled $884.2 million. Key contributors included corporate tax, departure tax, withholding taxes, and excise duties, where collections were higher than anticipated. Additionally, non-tax revenue saw a substantial increase, rising over 16 percent from the previous year.
While VAT collections did decline year-on-year as a result of the rate reduction, they still performed better than initial predictions for the quarter. This underlines a trend of robust consumer spending within the economy. The Ministry of Finance emphasized that this solid revenue performance indicates sustained economic momentum and improved compliance across various tax categories.
The promising economic outlook is encouraging for the fiscal landscape, suggesting that proactive government measures are effective and helping to strengthen public finances. The improved revenue collections not only bolster the government’s ability to fund essential services but also reflect an increasing consumer confidence in the economy. This situation bodes well for future economic stability and growth.