Former leader of Antigua & Barbuda, Lester Bird has warned that the jurisdiction’s inhabitants are facing a period of fiscal austerity in 2005. He also predicted that harsh tax rises are on the horizon, as the government attempts to rein in its massive debts.
Speaking on local radio, Mr Bird, who was ousted from power in the election last year which ended the Labour Party’s long spell as the governing party, painted a gloomy picture for the country’s prospects in the months ahead.
“Our people will be severely burdened and heavily stressed by high taxes and the reality is that these things will take a serious toll on our community. Many persons will not be able to pay their mortgages, they can't pay their insurances, they can't pay for many of the things which they have become accustomed to," Mr Bird predicted.
The ex-Prime Minister went on to add: "Among the taxes will be the already announced income taxes and increased property taxes. Many hundreds of people will lose their jobs, many have already lost their jobs and the truth is, the Minister of Finance has already declared that the United Progressive Party (UPP) Government will reduce public sector expenditure.”
Antigua & Barbuda began a consultation on tax reforms in October 2004, as the government began the onerous task of patching up the nation’s tattered finances.
Launching the first public meeting on tax reform last year, Minister of Finance Dr Errol Cort conceded that a “chronic fiscal imbalance” has arisen between what the government spends and what it receives in tax revenues.
This fact was highlighted in the IMF’s Article IV consultation with Antigua & Barbuda, concluded in September 2004. The IMF report suggested that years of fiscal mismanagement had led to a very large build-up of public debt, close to EC$3 billion (US$1.1 billion), equivalent to 135% of GDP at the end of 2003.
The Fund urged the Antiguan government to embark on a “bold and comprehensive” strategy in order to put its fiscal house back in order.
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