"Without a strong fiscal policy, the gains that can be made from economic growth will be extremely limited," Banks told the House of Assembly after announcing that Anguilla's gross domestic product (GDP), in real terms, grew by 15% in 2006 to ECD281.9 million, according to the government's official statistics.

Preliminary estimates for 2007 indicate that the economy grew by in excess of 10% in real terms, representing the fourth consecutive year that real GDP growth would have exceded 10%. Hotels and Restaurants remained the largest sector of the Anguillan economy, accounting for 32.7% of economic activity. Banking and Insurance was the next largest sector, accounting for 17.1% of the economic activity, followed by Construction, which accounted for 16.7%.

While Banks said that these figures represented "an impressive achievement", he warned that this level of growth is unsustainable, as the economy is already experiencing severe shortages in labour, which is contributing to rising wage inflation, particularly in the construction sector.

As a result these inflationary pressures, Banks announced that the government would extend a moratorium on the commencement of new large foreign direct investment tourism projects on which construction had not been started, which was introduced in October 2005. The government also intends to continue a moratorium on the issuance of Alien Land Holding Licenses, with the exception of licenses for the purchase of real estate in the approved resort residential tourism projects, which was introduced in February 2006, when the government was facing an inflation rate exceeding 10%.

Continuing on the theme of fiscal policy, Banks told lawmakers that the government will "continue to focus on a system of low taxes, an efficient revenue collections system, expenditure control, a sound public debt management strategy and a system of sound risk management."

"In relation to revenue, the government of Anguilla will continue to implement a tax system that will not be burdensome to the poor, that encourages investment and that are sustainable in the long run. We will continue to look at best practices for implementing taxes, while continuing to maintain our image as a low tax jurisdiction," he declared.

The main new revenue measure projected for 2008 is the implementation of a new Property Tax system. New property tax laws, which were being drafted in December, were expected to be implemented imminently, and the new tax system was projected to become fully operational by July 1, 2008, Banks stated.

The Finance Minister also announced the introduction of a new Departure Tax at Blowing Point for all non Anguillians and non-residents departing Anguilla by sea. This Departure Tax will be ECD53.00 or USD20.00. Visitors who are traveling overseas for the day and Anguillians who use the ferry service will continue to pay the Seaport Tax of ECD13.00 or USD5.00.

On the revenue side, import duties are projected to raise some ECD80 million for the government in 2008. This amount is an increase of 54% over the 2007 Budget without any new tax measures. Banks said that import duty revenues are likely to continue increasing, alongside the country's rapid economic growth and rising foreign direct investment.

With the territory relying more on foreign labour, the revenue realized from Work Permits is expected to show a 100% increase in 2008 over the 2007 Budget, although no increases in fees are planned for 2008.