Antigua and Barbuda Dropping Taxes

January 28, 2014 Taxation in Antigua and Barbuda

Antigua and BarbudaST. JOHN’S – Low-income earners, single parents and government workers in Antigua and Barbuda will soon be better off, as the government lowers taxes, hikes benefits, and begins paying owing salaries.

Late last week the Minister of Finance and Economy of Antigua and Barbuda Harold Lovell unveiled the national budgetary plan for 2014, containing several changes which are intended to vastly improve the standard of living in the country while stabilizing the national economy.

In line with the proposed measures, starting from the beginning of this calendar year, the tax-free threshold on personal incomes will be raised from XCD 3 000 per month to XCD 3 500 per month, and, in addition, all personal incomes of up to XCD 15 500 will be taxed at a rate of 8 percent, instead of the previous rate of 10 percent.

It is estimated that these tax changes will primarily benefit low-income earners, with 4 000 taxpayers now expected to pay no income tax at all, and an additional 14 000 medium- and high-income workers seeing their average tax payment slashed by 20 percent.

The reduced tax obligations are expected to cost the government approximately XCD 9 million in lost tax revenues, however, despite the expected drop in collections, in his presentation speech Harold Lovell confirmed that no existing taxes will be hiked, and no new taxes will be introduced, adding that in order to compensate for the forecast loss in revenues “…we will only need to grow the economy by 1.72 percent, that is very, very realizable.”

The budget plan also indicated that the government will also expand the People’s Benefit Program to grant to single parents a XCD 215 per month benefit, regardless of how much income they currently earn, and the government will also begin repaying some of the XCD 100 million currently owed to public sector workers for unpaid salaries from as early as 2002.

Photo by: Derek Hatfield

Tags: