CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Antigua Comments On Fiscal Reform, Invites IMF To Consult On Tax System

Antigua Comments On Fiscal Reform, Invites IMF To Consult On Tax System

Tax-news.com

14 November 2000


Antigua and Barbuda is to engage in a programme of fiscal reform and has invited the International Monetary Fund (IMF) to send representatives to Antigua for consultations with the government, private sector and trade unions on a "new, efficient, effective and modern tax system". The government plans to introduce the new tax system as soon as possible after the IMF has "consulted the relevant bodies and its recommendations have been reviewed by the Ministry of Finance."

Antigua's Prime Minister Lester Bird last week asked the IMF to "to consult with the private sector, through the Chamber of Commerce and the Employers Federation as well as the trade unions while working closely with the Government" in proposing a tax system "that commands a consensus of support"

A press release from the Government of Antigua and Barbuda said that Lester Bird had pointed out that while the IMF work was being carried out "the laws governing the payment of taxes by the business community, as adopted recently by the House of Representatives, will apply from the date of the Bill's assent by the Governor-General...this means that the current plans for a 2% tax on gross income, less certain exemptions, will apply to unincorporated businesses and a 40% tax on profits will apply to incorporated businesses, for the period required by the IMF team to complete its consultations and submit proposals to the government for review and implementation. This period is expected to be about 18 months but could be sooner depending on how early the IMF mission could complete its work.'

Here is the full text of the Government's Statement on Fiscal Reform:

The Government states clearly its position that Audited Reports of Government's accounts should be tabled in Parliament within the appropriate period after the end of every year.

The fact that such reports have not been tabled for 10 years is not as a result of any direction or influence of the Cabinet. The government states categorically that it has nothing to hide and would welcome the publication of the accounts, since such publication would end, once and for all, the innuendoes and slurs of its detractors.

The failure to submit these accounts is a matter of great concern to this administration, and several steps have already been taken to correct the situation. Changes have already been made in the Department of the Accountant-General which is solely responsible for the submission of Government accounts to the office of the Director of Audit for auditing.

In addition, as the Prime Minister announced recently, the Government is in the process of recruiting experienced government accountants from abroad to head a team of local persons who will finalise the accounts for each of these years as soon as the thoroughness of the job and human capability can achieve it. These accounts will be passed immediately to the Director of Audit for completion of the audits with all necessary attention and despatch.

As the accounts for each year are audited, the Minister of Finance will lay each of them before parliament. Within a year, therefore, Government expects that there will be a steady stream of audited accounts before the Public Accounts Committee.


With regard to fiscal policy generally, in the Throne Speech on 23rd March this year when the Government announced its policy and legislative programme, it was pointed out that the handful of businesses which are incorporated paid $18.1 million in taxes in 1995 while more than 2,000 businesses (sole traders and partnerships) paid only $1.44 million. In 1999, while the handful of incorporated businesses increased their tax payments by $15.5 million to $33.6 million, the over 2,000 sole traders and partnerships paid $1.54 million, an increase of merely one hundred thousand dollars.

It was evident that many businesses were either evading or avoiding tax without regard to the facilities provided by the State that they enjoyed.

In the Throne Speech, Government announced that it would be introducing amendments to the existing laws "to ensure that those professionals, businesses and corporations, who should normally pay taxes on their income, pay a part of it on a monthly basis". After the first amendments to the legislation went before Parliament and certain members of the business community objected to those amendments, the Government invited the Chamber of Commerce to study the amendments and to recommend measures that would ensure that taxes were paid. The Chamber declined to do so.

Nonetheless, the Government took account of the views of several businesspeople in revising the amendments that it has introduced in parliament. Consequently, it abolished the 25% tax on unincorporated businesses (sole traders, partnerships) and required them to pay only 2% on their gross income after a number of deductions are made. Government also agreed that incorporated businesses would continue to pay 40% tax on profits provided they do so on a monthly basis. This system, reflected a consensus of opinion throughout the society, except for those who wished to pay no taxes at all.

On a going forward basis, Government continues to be keen to reform the tax system to make its rates, administration and collection more efficient, effective and modern in a way that commands a consensus of support. To this end, the Government intends, as a matter of priority, to invite an appropriate international agency to send a team of experts to consult with the Government, the private sector and the trade unions on the establishment of such a tax system with the condition that it should not include the re-introduction of personal income tax to which the governing Labour Party is philosophically opposed.

During this period, the laws governing the payment of taxes by the business community as adopted by the House of Representatives, will apply from the date of the Bill's assent by His Excellency The Governor-General.

As soon as practicable after the agency has consulted the relevant bodies and its recommendations have been reviewed by the Ministry of Finance, the Government will introduce the new tax system.

It is expected that this work, including the period of consultation and study of the areas of fiscal reform and the submission of recommendations and their review, could take a period of 18 months to two years. However, if it is completed earlier, the new system will be introduced earlier.

At the same time that this work is proceeding, government will also make changes, and introduce measures, to ensure that the Customs Department is reformed and strengthened to undertake its work fairly, efficiently and effectively.

Cabinet Office
St John's
8th November 2000

Note to Editors:

Highlights of the Government's Statement are as follows:

1. As part of its fiscal reform policy, Government will secure the services of an international agency, competent in tax matters, to send a team to consult with the government, the private sector and the trade unions on a new tax system with the condition that it should not include personal income tax to which the governing Labour Party is philosophically opposed. The objective is to create a system that commands consensus in the community.

1. The work of the agency including consultation, study and writing of a report, plus the subsequent review of recommendation and the drafting of a new law and its passage through parliament should take 18 months to 2 years. However, the new tax system will be introduced sooner if the process is completed earlier than 18 month to 2 years.

1. During the period that a new system is being devised and legislated, the law adopted three weeks ago by the House of Representatives will be applied as soon as it is passed by the Senate and receives the assent of the Governor-General. It remains obvious than many businesses have been avoiding or evading taxes that are legitimately payable, and the system adopted by the House of Representatives will ensure that taxes are paid while a new system is being devised.

1. Government's position is that Audited Reports of government accounts should be tabled in parliament in accordance with the law.

1. Government states categorically that non submission of the accounts is not a result of Cabinet influence or direction. Government would welcome the publication of these accounts since such publication would end innuendoes and slurs.

1. Government has already taken positive steps to ensure that the accounts are tabled in Parliament as soon as possible. It has made changes in the Department of the Accountant-General and it is in the process of hiring expert government accountants from abroad who will work with a team of local persons to finalise the accounts "as soon as the thoroughness of the job and human capability can achieve it". These accounts will be tabled in parliament as soon as each year's accounts are completed.

1. Government will also make changes and introduce measures in the Customs Department to ensure that it is reformed and strengthened to carry out its work "fairly, efficiently and effectively".
(Ends)

.

To see today's news, click here.

 















Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »