WILLIAMS... no, I don’t buy it. I don’t buy it. In fact, it was the intent for it to be presented that way. It’s based on the law (Joseph Wellington)
‘I don’t buy it’
Fiscal commissioner rejects ‘chaotic’ label for budget reform, insists on legal compliance
FISCAL Commissioner Courtney Williams has firmly rejected Finance Minister Fayval Williams’ claim that simultaneously tabling revenue estimates with expenditure plans would create chaos. Instead, the commissioner insists this simultaneous presentation is actually required by law and is not an optional suggestion.
The commissioner made the call in his first report to Parliament after reviewing the 2025/26 Budget which he said is “broadly credible”.
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Still, Williams, who was appointed Jamaica’s first fiscal commissioner in March 2023 after a distinguished 30-year career in public service, has identified several critical weaknesses in Jamaica’s budget process. At the heart of his critique is the practice of having Parliament approve expenditures before all revenue measures are disclosed, a sequence he argues undermines fiscal transparency and prudent financial management.
The finance minister, however, dismissed his critique on Tuesday in her maiden presentation, saying doing so “would be very chaotic”, and pointed out that it has never been done before.
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But while admitting that there is no precedent for such an action, the fiscal commissioner dismissed the minister’s concern that doing so could be “chaotic”.
“No, I don’t buy it. I don’t buy it,” the fiscal commissioner told the Jamaica Observer in response to the minister’s claim. “In fact, it was the intent for it to be presented that way. It’s based on the law,” declared the veteran fiscal economist.
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In the Economic and Fiscal Assessment Report (EFAR), the title of the Independent Fiscal Commission’s report assessing the budget, it was pointed out that the Fiscal Audit and Administration Act (FAA Act) — which outlines the framework for managing public finances — requires the provision of “details as to revenue policy and administration, including planned changes to taxation and other revenues”.
Minister Williams said she was “not sure” how tabling revenue estimates in February would work, but the fiscal commissioner was unmoved in the recommendation, arguing that the current practice of having Parliament approve expenditures before all revenue measures are disclosed fundamentally undermines transparency and prudent financial management, creating a scenario where lawmakers make critical fiscal decisions without complete information.
“But even outside of the law, let me tell you the reason why they don’t want to do it. I think whoever is minister wants to hold that [as] a grand announcement. That is the bottom line.”
He dismissed arguments that the revenue measures cannot be tabled in accordance with the law for “market-sensitive reasons” as being nothing but a smokescreen.
“That doesn’t hold, because the announced revenue measures are set to take effect on May 1,” he said.
He expressed strong concerns about the current budget approval sequence, questioning its procedural integrity. “The question is, does this look a bit shabby to say a budget was tabled, the Parliament approved the budget, and then some weeks after, additional revenue measures are introduced?” he said. He noted there is no secondary Standing Finance Committee convened to examine these later revenue measures, creating a significant gap in parliamentary oversight.
Those revenues measures, a $9.2-billion package of tax givebacks range from lower consumption tax on electricity to a higher income tax threshold that will move from $1.7 million over three years to $2 million, starting this April.
The fiscal commissioner said it is unlikely that those measures, and any announcements the prime minister may make when he speaks next Thursday, were taken into consideration when the Government projected that it will collect $945.5 billion in taxes in the upcoming fiscal year and that the figure would have to be recast lower to account for the revenue measure with no indication how the shortfall would be made up. The Government is, however, now in the process of selling its remaining 20 per cent stake in TransJamaican Highway to raise a similar amount to the taxes being given up.
The fiscal commissioner also expressed concern that the Government’s heavy reliance on and the potential for fallout in tax revenue inflows, during the last two weeks of March, represents a substantial fiscal risk.
“To minimise this risk going forward, the Government should give due consideration to adjusting the timeline for filing of tax returns, specifically, shifting the due date from the last month of the fiscal year to a month in the first quarter,” the fiscal commissioner wrote. The finance minister acknowledged the risk but argued that the collection of the revenues cannot easily be shifted into the month of April “because expenses have to be paid in the month of March”.
The fiscal commissioner reasoned it can be done.
“First of all, the bills to be paid in March… most are paid before March 15,” he said, adding that public sector workers are also paid early in March. “And usually the accountant general paying the bills will have a cut-off time for invoices to be submitted to make payments before the fiscal year ends… so the spending that is taking place in March would have been from revenues collected before. So the revenue from March 15 to the end is really being used for the next fiscal year.”
“One of my roles is to assess whether or not the policy is adhering to fiscal responsibility. And the fiscal responsibility law requires the tabling of the revenue measures with the expenditure plan. If they don’t intend to adhere to it, then the Government can change the law.”
He also pointed out that the recent favourable review of the country’s creditworthiness also took into consideration the law under which revenue measures are required to be tabled ahead of the budget debate.
Finance Minister Fayval Williams has rejected a recommendation for the revenue measures to be tabled simultaneously with the Government’s spending plan each year. (Naphtali Junior)
