International Monetary Fund Visits Antigua For Tax Talks

by Amanda Banks, Tax-news.com, London

30 April 2001

A team from the International Monetary Fund (IMF) is currently visiting Antigua & Barbuda at the request of the Prime Minister, Lester Bird, to discuss the issues that have emerged from the IMF's recent Article IV consultation with Antigua & Barbuda concerning the country's tax regime and administration. Governor-General, Sir James Carlisle, explained to the country's media that the aim of the IMF's mission was to 'advise on a tax system that could command consensual support while meeting the needs of the country as a whole.'

The four-member IMF team, led by senior economist Russell Krelove, has already consulted with government officials including Lester Bird - in his capacity as Finance Minister as well as Prime Minister - Senator Asot Michael and Planning Minister Gaston Browne. Discussions have also taken place with the Antigua & Barbuda Workers Union.

In its Article IV Consultation with Antigua & Barbuda last month, the IMF recommended that the government suspend employment and restrict expenditure, particularly in the form of ad hoc wage increases, in order to cap the government's financial debt. The IMF stated that its directors viewed with concern 'the continued deterioration in the central government finances. They emphasized that substantial adjustment is needed in 2001 to avoid the emergence of new arrears, and to pave the way for higher and sustained growth over the medium term. They saw the generation of public saving as key for supporting the investment needed to expand and diversify the economy. In this regard, directors called for a reorientation of the government's approach to fiscal management including both revenue and expenditure.'

The Article IV consultation also revealed that Antigua's & Barbuda's 'real gross domestic growth is estimated to have slowed to three-and-a-half percent in 2000, owing to weakness in the tourism sector.' But it was not all doom and gloom as the IMF observed that 'despite the negative adverse effects of recent hurricanes, which put a damper on tourism, the economy grew moderately in 2000, inflation was nil and unemployment declined.'

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