There will also be a 15% excise duty on alcohol and tobacco products and a 2% increase in the Social Services Levy on salaries in excess of EC$8,000 monthly.

Dr Douglas said that liberalisation and increased competition in the telecommunications sector should prevent any increase in overall telecommunications costs. "We feel that the time is now right to extend the current tax on international calls to land based calls," he said, pointing out that the liberalisation of the telecommunications sector was a very costly and time consuming exercise and the Federal Government was still servicing a loan from the World Bank that was used to finance the liberalisation process. "The increased tax will therefore assist in the servicing of this loan," he told the Federation.

Income Tax Legislation will be changed to require companies to pay tax at the same time they file their tax returns, by the 15th of April each year - previously they had three months after filing in which to pay.

The Prime Minister said that the increase in the social services levy was necessary to help cope with the fiscal adjustment process following the closure of the sugar industry, servicing of its debt, providing for the health, training and social protection of former sugar workers, and the maintenance of the environment and land management issues.