IMF Recommends Establishment of Single-Window System at Customs

The IMF has recommended the establishment of a single-window system at Customs to streamline operations and enhance efficiency in tax administration in Antigua and Barbuda.

This step is crucial as it can facilitate electronic filing, payment, and registration of taxes, making compliance easier for businesses and improving overall revenue collection.

In addition to the single-window system, the IMF highlighted the importance of tightening controls on tax exemptions and modernizing the property taxation framework.

These measures aim to boost domestic revenue mobilization without resorting to new personal income taxes or increasing the Antigua and Barbuda Sales Tax (ABST) rates. The organization also urged the creation of a large taxpayer unit and an upgrade of IT systems to fortify tax administration capabilities.

These recommendations are based on the nation’s current tax revenues, which the IMF noted are still below the government’s fiscal resilience targets and comparatively low compared to those of peer countries.

Amidst these tax reform discussions, the IMF reported a favorable economic outlook for Antigua and Barbuda. A continued post-pandemic recovery is projected to see real output rise above pre-pandemic levels in 2024.

Economic growth, estimated at 4.3%, is primarily fueled by a strong tourism sector and significant one-off events, including the International Conference on Small Island Developing States and the T20 Cricket World Cup. Nevertheless, as the recovery progresses, growth is expected to moderate to 3% in 2025 and further decline to 2.5% over the medium term.

The IMF also identified inflation, which reached 6.4% in 2024 largely due to rising costs in areas like communication and indirect taxes, with expectations of reducing to 3.5% by 2025 and 2.4% in 2026.

Despite positive signs such as a drop in public debt from around 100% of GDP in 2020 to 67% in 2024, the IMF warned that gross financing needs may remain around 10% of GDP.

The organization emphasized the need to address both external and uncertain domestic arrears, as they currently limit financing options and pose challenges to debt sustainability. Furthermore, the IMF noted that the current account deficit had narrowed to 7% of GDP in 2024, thanks to an improved service trade balance driven by tourism and a reduction in the goods deficit due to decreased imports.

The resilience of foreign direct investment inflows continues to support ongoing hotel constructions in the region.

Regarding the financial sector, the IMF assessed it as broadly stable, with recovering credit growth and non-performing loans approaching acceptable levels, aided by the establishment of a regional credit bureau that promotes swift access to credit while upholding lending standards.