"This government, which has shown an outstanding track record of protecting the poor and of showing great care and concern for all citizens and residents of this country, would only introduce tax measures as a last resort," he announced.

Amongst the changes unveiled by Dr Douglas on Tuesday was the refinement of the jurisdiction's tax concessions regime in order to provide incentives for overseas investors to enter into joint ventures with local businesses and individuals.

"We have been insisting that foreign investors would only be permitted to open businesses in areas where, because of the required level of expertise or capital, locals could not operate effectively. But this is a defensive strategy that may not be sustainable in the context of globalization," he explained.

The Prime Minister also proposed the abolition of the Aliens Loan Levy for the 2004 fiscal year, explaining that the tax is no longer feasible in the current business climate.

"Given the global nature of banking, some local financial institutions are adopting the practice of booking the loans in other countries to avoid the levy. This means we get neither the benefit of the Alien Loans Levy nor the benefit of the corporation tax that would have been payable in respect of the interest on the loan if it were booked in St Kitts and Nevis," he explained, adding that:

"Much of this tax falls on the immigrant workers in our Federation, including those from Santa Domingo and CARICOM countries, because they are not able to avoid this levy in the same way as the large foreign companies operating here. I therefore propose the abolition of the Alien Loans Levy for fiscal year 2004."

Dr Douglas also announced plans to pass legislation in 2004 replacing the rental-value property taxation system with a market value-based regime, and revealed that the government would be more vigilant in the collection of tax, and will continue the programme of tax audits initiated by the Inland Revenue Department.

He explained that the latter measure was necessary because "no modern tax administration can operate effectively without the ability to carry out their own tests and checks to establish the accuracy, veracity and completeness of the returns submitted by taxpayers".