In response to anguished protests from local businesses, Antiguan Prime Minister Lester Bird announced at a press conference last Friday afternoon that the administration had taken a decision to repeal the Income Tax (Amendment) Act 2000 and the 25 percent Business Tax.
The Prime Minister said that his government had no wish to burden any sector of the society with heavy or unfair taxation.
'We simply want to spread evenly and equitably the cost of providing the services every citizen in the country requires. It is in this context that my government has carefully considered the constructive and helpful comments we have received from many persons in our community who are willing to shoulder their responsibility to the country as a whole.
'In light of their comments, Cabinet has reflected deeply on how we might go forward together to institute a system which brings in the revenue that the state requires to fulfill its obligations to all people without exception,' Mr. Bird said.
He pointed out that 'it cannot be right in any society that some people make vast sums of money and pay little or no taxes to the state.
'Infrastructure such as roads, health clinics, and a hospital have to be paid for. They serve everybody, and everybody should have an obligation to meet their costs. The same argument applies to our social services, such as education, health, fire brigade and police.'
Mr Bird refuted statements that Antigua & Barbuda is one of the highest taxed countries in the OECS and presented statistics showing that Antiguans and Barbudans pay the lowest taxes as a percentage of gross domestic product among the neighbouring group of island nations, including St. Kitts/Nevis, St. Lucia, Grenada, Montserrat, Dominica, and St. Vincent & the Grenadines.
'In Antigua & Barbuda, total tax as a percentage of our gross domestic product for the years 1986 to 1997 is only 18 percent' said the Premier.
It is understood that the existing 40 percent tax payable by incorporated companies, such as Cable & Wireless Ltd. and the commercial banks, will continue as before, except that assessments will be payable on a monthly basis.
No announcement was made as to how the revenue deficit would now be made up, but the Government cannot just ignore the problem - it will have to find some other means of raising revenue.
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