Antigua's Turnover Tax Now In Operation

Mike Godfrey, Tax-News.com, New York

18 January 2001

The Antigua & Barubuda media has reported that a new turnover tax aimed to boost the country's economy is now in full force. The country's Inland Revenue Department is currently issuing notices to businesses to confirm that they must now pay a 2 per cent tax on gross income.

Details of the notices, signed by the Commissioner of the Inland Revenue, Donald Edwards, asked for the tax payment to be submitted to the Inland Revenue Department by the 30th day of the following month. They stated: 'No tax is payable on the first $4,166 of gross income each month. This means that this amount is deducted from the gross income for the month before the 2 per cent is computed.'

In addition business owners are also required to submit a monthly summary of their gross income and: 'to maintain all records necessary to provide [their] daily income. This should include all source documents, such as sales slip, cash register tape, copy of receipts issued, bank statements, deposit slips, purchasing invoices, import warrants, inventory records, and all other relevant records. These documents should be available to the Commissioner at all times.'

Mr Edwards said: 'The law also provides for the income from credit transactions to be reported when received, but not later than 90 days of the date on which the credit was given, whether collected or not.'

There has been much controversy in the months leading up to the new tax requirement. At a Chamber of Commerce meeting in August 2000, after the proposal was announced by the government, members of the private sector voiced their concern and Chamber of Commerce President, Clarvis Joseph, claimed that the imposition of more taxes upon local businesses (when they had previously been given tax concessions) could be thought of as "immoral" and would result in a lack of private sector confidence in the government.

The Chamber of Commerce also led a three-day shutdown of the country's business sector during the Independence celebrations last year to protest government’s refusal to repeal entirely the Income Tax (Amendment) Act 2000 and the related Inland Revenue Act.

But not all saw the government's introduction of the new tax as negative. Indeed, Antigua's Prime Minister, Lester Bird, was named Man of the Year 2000 by the country's local radio stations who claimed that the accolade was largely down to Mr Bird's stance on domestic taxation and, on the international stage, his handling of the initiatives of the OECD and FATF on harmful tax competition and money laundering.

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