Antiguan Ministers Argue For New Income Tax

by Amanda Banks, Tax-News.com, London

29 March 2005

According to a report in the Caribbean regional media, ministers in Antigua and Barbuda are keen to impose a new tax on the jurisdiction’s wealthier citizens in order to establish a source of revenues for a new stabilisation fund.

Caribbean Net News reported that the proposal for a new tax, intended to help turn around the country’s fiscal finances, was put forward during a parliamentary debate on the Income Tax Amendment Act, with Minister of Housing, Culture & Social Transformation, Hilson Baptiste calling on high income earners to shoulder most of the new tax burden.

“You have to have a conscience. If you love Antigua it’s a way to demonstrate you care…help somebody else,” urged Mr Baptiste.

“Let us all make a conscious sacrifice to take Antigua/Barbuda out of the mess that it is in,” he stated.

Baptiste argued that such a burden may only have to be borne for a period of two to three years.

Minister of State for Culture, Independence & Community Pride Programme, Eleston Adams was also of the opinion that the country cannot hope to make progress without a new tax.

“It is absolutely vital, its critical Madam Speaker, that we all come together, look at what is happening around the country...the bad roads, no medical supplies, look at the school buildings, these are some of the things we have to look at and ask ourselves is it wise not to pay income tax,” stated Mr Adams.

Last year's IMF report on Antigua & Barbuda suggested that years of fiscal mismanagement had led to a very large build-up of public debt, close to EC$3 billion (US$1.1 billion), equivalent to 135% of GDP at the end of 2003.

The Fund urged the government to embark on a “bold and comprehensive” strategy in order to put its fiscal house back in order, although by February 2005, a subsequent ‘courtesy call’ by IMF Executive Director for Antigua and Barbuda, Mr Kevin Lynch, observed that the jurisdiction had made satisfactory steps towards implementing a solution to its fiscal woes.

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