Sales Tax Comes Into Force In Antigua And Barbuda

by Amanda Banks, Tax-News.com, London

02 February 2007

The new Antigua and Barbuda Sales Tax (ABST) has become effective as of Monday January 29, 2007, the jurisdiction's government has announced.

Preparations for the ABST began in early 2005 with a feasibility study to review the benefits of introducing a value-added type tax. After this study, the government prepared an ABST White Paper which was presented for discussion and review with all relevant stakeholders.

A number of concerns raised by the stakeholders were taken on board, and resulted in changes to ABST policies. In particular, the government agreed with the private sector that the ABST threshold should be changed from $1,000,000 to $300,000 to ensure equity to businesses, and the list of zero-rated and exempt items has been expanded on several occasions since 2005. Businesses also raised concerns regarding the best timing for introducing the ABST, and to meet the concerns raised, the government shifted the implementation date on several occasions to ensure that they had sufficient time to prepare for its implementation. April 2006 was the original implementation date, which was then shifted to third quarter 2006, then to January 1, 2007. Finally January 29, 2007 was selected as the implementation date.

A number of other Caribbean countries have introduced or are planning to introduce a tax similar to the ABST. Jamaica, Barbados and Trinidad & Tobago have had a value added tax for several years. Belize, Dominica, and Guyana have introduced a value added tax since early 2006. A value added tax will be implemented in St. Vincent and the Grenadines on May 1, 2007 and Grenada will be introducing the tax later in 2007. Other countries, such as St. Kitts and Nevis, St. Lucia, and the Bahamas are in the early stages of considering the benefits of a value added type tax.

The introduction of the ABST is part of the government's overall reform program. With the introduction of the new tax, several other taxes will be repealed, including Consumption Tax, Hotel (bed-night) Tax, Hotel Guest Tax, Hotel Guest Levy, Restaurant and Catering Services Tax, and Telecommunication Tax.

The Ministry of Finance has also announced plans to proceed with a Customs Renewal Program in 2007 which will streamline and modernize customs operations.

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