Report Claims Antigua Facing Financial Crisis

Robert Lee, Tax-news.com, London

02 November 2000

The Antiguan prime minister Lester Bird is under immense pressure at present, with income tax protests earlier this week forcing a virtual shut-down of the country as many businesses closed their doors and downed tools in response to the government’s refusal to honour its commitment to entirely repeal the Income Tax (Amendment) Act 2000. Whilst both sides are claiming victory - Mr Bird saying 'I am proud of those who would not allow themselves to be terrorised into supporting an action they know to be wrong' - the prime minister is facing an even greater crisis, according to a report in a local newspaper, the Outlet, which claims Antigua and Barbuda is in the throes of a financial catastophe.

It perhaps comes as no surprise that the newspaper is edited by former opposition senator Tim Hector. Last week's article accused the Lester Bird administration of mismanaging the economy and called for a government of national unity. It said the government’s mis-management of the economy and its dependence on the offshore financial sector – which does have advisories against it – have put the country in poor economic shape.

The country’s offshore sector has been in the news just this week, having been hit by the US Internal Revenue Service (IRS) which has been granted powers to investigate records for American Express and Mastercard charge, debit and credit cards issued or paid by banks in Antigua and Barbuda, the Bahamas, and the Cayman Islands in 1998 and 1999. The Outlet commented: 'The upshot of this is that financial surveillance on Antigua and Barbuda, by the US, will increase, and financial sanctions imposed on Antigua and Barbuda will continue.'

It went on to say that the government’s boast of having "model" offshore legislation was of no comfort to the international community, as demonstrated by the continued imposition of financial advisories by the US and the UK since April 1999. 'In sum', the newspaper said, 'international governments do not trust the word, the agreements signed, nor the laws enacted by the Lester Bird government. This is undeniable. It is a terrible state for any government and any people to find themselves in.'

It claimed the government’s integrity was being further undermined by the crisis over the two per cent tax on gross earnings which led to the three-day shutdown of businesses this week. It said: 'There is no escaping in these circumstances a government of national unity to clean up the mess. Government and opposition together represent, without a doubt, the will of the people.'

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