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(CMC) – Prime Minister Gaston Browne has presented an EC$1.2 billion (one EC dollar=US$0.37 cents) budget to parliament, outlining new taxes and warning tax dodgers that it will not be business as usual.
Browne told legislators that recurrent expenditure is estimated at just over one billion dollars, comprising EC$914.9 million in recurrent spending and capital spending of EC$130 million, while recurrent revenue has been pegged at $966.2 million, including EC$34 million in grants.
“Additionally, total principal payments amount to EC$360.1 million. This, along with the EC$78.8 million overall deficit and the EC$10 million allocated to reduce arrears to local contractors and suppliers, bringing the financing requirement for 2019 to EC$448.9 million.”
Browne said that in order to satisfy this requirement, his administration will raise EC$274.8 million from securities issued on the Regional Government Securities Market, and access loans and advances of EC$174.1 million.”
Browne, who is also finance minister, said that a tax would be introduced to fund the University of the West Indies campus at Five Islands.
“One of the options is a 10 per cent tax on net profits of telecommunication companies, financial institutions and insurance companies, and the country’s sole petrol distribution company, West Indies Oil Company Limited.”
He said based on analysis of the data “this tax should yield in the region of EC$15 million annually and it will be implemented with effect from this fiscal year for a period of 24 months in the first instance.”
Browne said if the tax measure is to be continued “we will,” adding “the reality is the university must be funded and it will be funded”.
In his address, Browne also indicated that the taxes on sugary beverages would be implemented this year, given the fact that too many people were being affected by non-communicable diseases (NCD).
“Our government will be introducing a tax on sugar-sweetened beverages and we are doing so to protect the health of the people of this country,” he said, telling legislators that detractors would regard the measure “as a revenue raining initiative, when indeed what we are seeking to do here is to reduce the demand to protect our people”.
“We cannot build an economic powerhouse with unhealthy people,” he said.
Browne said last year, tax waivers amounted to an estimated EC$330 million, a significant proportion of which was granted to existing and profitable businesses.
He said this EC$330 million mainly represents waivers of customs duties, ABST, revenue recovery charge, corporation tax, unincorporated business tax, and stamp duties.
“To secure fiscal balance and stability going forward, these levels of concessions cannot continue. Taxes incurred must be paid and collected so that government can continue to provide the services and benefits everyone expects.
“Reducing total tax exemptions and strengthening tax administration will be the cornerstone of the government’s fiscal strategy into the medium term. With the revocation of the corporate income tax waivers, a new corporate income tax credit regime will be introduced.
“If our country is to become an economic powerhouse, capable of sustainable, inclusive growth and creating opportunities for its citizens and residents to generate wealth, it needs to build fiscal resilience. “
Prime Minister Browne also warned tax dodgers that his administration would be moving to acquire all funds owed to the state despite the island’s constant economic growth over the past four years.
“Improving revenues to meet our development objectives requires effort by everyone. So, everyone, individuals and companies, must pay our education levy, social security, medical benefits, import duties, RRC, ABST, and corporate income taxes,” he said, warning that any person or company, “who reneges on these payments, evades paying them, or uses corrupt means to deprive the treasury of revenue, is hurting every other person and company in our nation”.
“They should be warned now that our government will not allow this behaviour to continue; it is not fair, it is not just, and it is not acceptable. Our government, as the wardens of the interests of all the people, will clamp down on the excesses of the few,” Prime Minister Browne said.
He said that his administration would implement the “Prime Minister’s Entrepreneurial Development Programme (EDP)” announced last year, which will seek to provide access to funds and training for any citizen who presents a viable business plan.
“In the first quarter of this year, the EDP will be launched with an initial EC$10 million provided by the government. The ultimate aim is a revolving fund endowed with EC$24 million to provide low-interest loans for working capital, machinery, and equipment, leasehold improvements, among other things.”
Prime Minister Browne said Global Ports is committed to providing $13.5 million to fund entrepreneurship in the tourism sector as part of their involvement in the country’s economic activity.
“The EDP will be complemented by the Eastern Caribbean Partial Credit Guarantee Corporation, which will also work with banks and other financial institutions to increase the flow of credit to micro, small and medium-sized businesses in the ECCU member territories.”
Browne told legislators that in 2018, Antigua and Barbuda’s economy was the fastest growing in the entire Caribbean Community (CARICOM) region, recording growth of 5.3 per cent.
“In the period, 2014 to 2018, the average growth of our nation’s economy was a remarkable 4.5 per cent annually. This country was recovered from the disaster of five previous years of decline, retrogression, and regression and placed on a firm, solid and steady climb to progress,” Browne said.
“Economic growth brings many benefits, but its seeds must be planted, and its trees nurtured to produce the beneficial fruits a nation needs. This task requires special management and financial acumen. And these are among the key competencies that our government has employed to the benefit of our people.”
In his address on Thursday, Browne praised several countries and institutions, which he said had invested in the country’s development through technical assistance, grants and loans.
“I take this opportunity to thank all who have made contributions of whatever size. Every cent counts. And we are very grateful. Mr. Speaker, it would be wrong of me not to make special mention of three countries that have particularly contributed to our nation’s well-being – namely the Bolivarian Republic of Venezuela, the Republic of Cuba and the People’s Republic of China.”
He said that Venezuela had written off 50 per cent of the debt owed to PDVSA for fuel imported under the Petro Caribe Initiative, amounting to EC$250 million.
“That is a significant gift to our people, Mr. Speaker, and one that we should acknowledge with great and resounding appreciation. The people of Antigua and Barbuda will remember the assistance of Venezuela and its people well into the future,” he said.
Browne said that Antigua and Barbuda will continue to urge a resolution of the internal differences in Venezuela, and pledge support for whatever his government might be able to do, to set the South American firmly on its feet, in service to all its people.
Browne also praised Cuba for its contribution noting that despite the continued imposition of the inhumane embargo by the United States, continue to provide educational, medical and technical assistance to countless countries in the region and around the globe.
“Antigua and Barbuda has benefitted tremendously from the generosity of the Republic of Cuba. Hundreds of our people have received professional qualifications, free of charge, from the Republic of Cuba and are making meaningful contributions to our state. We thank the Republic of Cuba for their continued generosity in the field of healthcare, medicine, infrastructural development and education.”
He also took time to thank China, telling legislators that last year “no other country or institution has contributed more to our development pursuits than the People’s Republic of China”.
“China has committed over EC$400 million in grants and concessional loans to fund the development of the St. John’s Port, the Knuckle Block Project, the proposed housing development, two polyclinics, and non-lethal military equipment and supplies. They have also provided technical assistance in many areas, including healthcare, education and agriculture.
“The relationship between the People’s Republic of China and Antigua and Barbuda, demonstrates that, in international relations, countries are well served by mutual respect and cooperation,” Prime Minister Browne said.
Debate on the budget begins on January 28.