ABST increase to yield $50 million annually

The Financial Secretary, Rasona Davis-Crump, has announced that the proposed increase of two percent in the Antigua and Barbuda Sales Tax (ABST) is expected to contribute approximately EC$50 million towards the government’s goal of increasing the Gross Domestic Product to 25 percent.

Davis-Crump confirmed on state television that the government will adopt the proposal of a two percent hike in the ABST, which will be the first increase since the ABST was introduced in 2007.

The Ministry of Finance has recommended a 17 percent increase to boost revenue collection, which includes an increase in luxury property tax from 0.3 to 0.5 percent effective 2024, a review of tax incentives and exemptions, and belt-tightening measures throughout the public sector.

The ABST rate in the tourism industry is currently lower than in other sectors, but the new recommendation is for it to be leveled. The FS explained that the rate for the tourism sector is currently 14 percent, and going forward, there will be a standard rate across the board for general consumption in Antigua and Barbuda, except for the list of zero-rated items.

The Ministry of Finance technicians have also called for a review of tax incentives and exemptions. Davis-Crump added that start-up companies should be given incentives, but such privileges cannot continue indefinitely, suggesting that they end once the businesses commence their operations.

The government rejected the suggestion of reintroducing Personal Income Tax (PIT), which was implemented by the United Progressive Party administration in 2004 but abolished in 2016 by the Gaston Browne administration.