Antigua to abolish income tax
The government of Antigua and Barbuda has announced it plans to do away with all personal income taxes, beginning in April.
Gaston Browne, the prime minister, said getting rid of income tax would not only “put more money in the pockets of the people, so that they can save or spend more for the benefit of the economy as whole”, but it would also “help to re-establish our country as one of the most competitive in the Caribbean and beyond”. Browne unveiled his plans in his latest budget, which will be debated on 1 Feb.
Antigua and Barbuda’s current personal income tax had been introduced by the United Progressive Party (UPP) – now in opposition – when it came to power in 2004. It has levied a tax of 8% on those who earn more than Bds$3,500 (US$1,750), and 15% on those earning more than Bds$25,000 (US$12,500).
In comments posted on the Antigua government’s website, Browne said the elimination of income tax would help to encourage companies to move their headquarters there, and professionals to relocate as well, “thereby creating more jobs”.
“Retirees will choose Antigua and Barbuda as their retirement home; CIP [citizenship-by-investment] investors will invest and chose Antigua and Barbuda over our competitors,” Browne added.
“The loss of Bds$37m from the elimination of the PIT [personal income tax] will be partially substituted by an increase in the Revenue Recovery Charge (RRC) from 10% to 13%, which is expected to yield an additional Bds$20m in revenue.” Key grocery items would be exempt from this charge, Browne added, referring to the RRC, a form of sales tax on imported items.
Browne came to office in 2014 with a pledge to make the twin island nation of Antigua and Barbuda an “economic powerhouse”. His predecessor, Baldwin Spencer, had already introduced a citizenship-by-investment programme the year before, in hopes of attracting wealthy individuals willing to invest significant sums in exchange for a passport. Such CIP programmes have been adopted by a number of Caribbean islands, many of which hoped to emulate the success St Kitts has had with such a scheme. Wealthy mainland Chinese and other Asian nationalities have been among the main targets.
Located in the Atlantic Ocean just north of Venezuela but regarded as being part of the “Caribbean”, Antigua is a former British colony, and as one of its overseas territories, still has strong ties to the UK. It was one of the first of the islands in that region to embrace tourism in order to boost its economy. It took a hit during the 2008 recession, though, when a US$7bn Antigua-based Ponzi scheme run by Allen Stanford collapsed, burdening the islands’ government with debt.
Antigua Barbuda’s main opposition party, the UPP, has criticised the decision to abolish all income tax, with its leader, Harold Lovell, arguing it would make life harder for citizens, not easier.