Antigua Government Mulls Tax Changes To Combat

by Amanda Banks, Tax-news.com, London

04 January 2001

The Antigua and Barbuda government plans to introduce a package of measures to combat its recent cash-flow problems. This is the message from Prime Minister Lester Bird, who stated in a New Year's address: 'Early in the New Year, I expect that these difficulties will be resolved. To achieve this, there will be changes. The changes will be in the personnel, in the system and in the approach.'

According to an article by the Caribbean News Agency (CANA), Prime Minister Bird did not comment on recent rumours that the measures may include a cabinet reshuffle. He has already said that personal income tax would not be changed but indicated that other tax rates may be increased. 'There will be changes to improve government's cash flow. But the changes will be fair, they will be equitable and they will be just,' he said.

CANA reported that the Prime Minister anticipated a degree of criticism from some tax payers but he added that 'a minority have profited wrongfully from the inefficiencies of the past to the detriment of the majority.'

Last year the government and the private sector became embroiled in a row over the introduction of a two per cent turnover tax on gross earnings to replace a 25 per cent business tax on net earnings. According to CANA, the government admitted that it was experiencing cash-flow difficulties but the Prime Minister denied criticism that the economy was in trouble by quoting the International Monetary Fund (IMF) which last year projected 4.5 per cent growth.

Prime Minister Bird said that in spite of a shortfall in the treasury, the government managed to keep up its foreign debt payments as well as financing capital projects. He argued: 'There was only hard graft and the ingenuity of a government to juggle scarce resources to meet both immediate and developmental needs. It is hardly surprising, therefore, that we encountered cash flow difficulties.'

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