Tax Cuts Announced in Antigua And Barbuda Budget

by Amanda Banks, Tax-News.com, London

03 April 2003

The government of Lester Bird has stuck to a previous promise on taxation and announced a series of tax cuts to stimulate investment and economic activity.

Pointing to the fact his government has lowered corporate tax from 40% to 35%, Bird revealed that a further cut was being considered to bring the rate down to 30% in the course of the year. He justified this move by arguing the extra money businesses earn will be reinvested in the territory and will thus create more employment and opportunities. The Prime Minister intends to open a dialogue with business to study how the tax cut will help expand the economy.

Another tax concession announced by the government is the reduction of withholding tax from 40% to 25%.

The Prime Minister and Finance Minister spoke of his intention to lessen the tax burden associated with vehicle purchases in order to help the country's bus and taxi operators, as well as business in general. This will mean a reduction in customs duties, consumption and customs services taxes which Bird calculated "have accounted for between 85 and 105 per cent of the cost of insurance and freight value of vehicles."

In tandem with a reduced tax burden, Bird announced that he envisaged a more efficient and streamlined tax collection system. This means reform on several levels is required, including a restructuring of the tax department and tighter monitoring of performance. This will hopefully reduce transaction costs and generally improve the standard of service, he revealed.

These reforms will also facilitate the use of e-commerce and e-government, the Prime Minister predicted.

"We are confident that these reforms will improve the environment for tax assessments, tax compliance and tax collection making it easier for all concerned," he concluded.

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