Antigua and Barbuda"s fiscal deficit surpasses US$100m

NEW YORK, USA

The Antigua and Barbuda government is projecting a fiscal deficit of more than US$100 million for this year.

Addressing a town hall meeting here over the weekend, Prime Minister Gaston Browne said the deficit “of about 130 million US dollars is due to overspending.

“Now, one would expect that when you have a government that would have borrowed extensively, they would have borrowed about two and a half billion dollars over the 10-year period that at least they would run a fiscally tight budget to make they have capacity tp pay the debts.”

The former administration during the presentation of the last fiscal package had projected a surplus of EC$10 million (US$3.7 million) for 2014.

But Browne told Antigua and Barbuda nationals residing here that national borrowing surpasses what the country earns annually.

“These are issues we will have to address and we have estimated that based on the debts that we actually left out of the national debt calculation that our debt to GDP (gross domestic product) is perhaps in the region of 125 to 130 per cent”.

Browne said that the figure is “extremist high” when compared to the global benchmark estimated at no more than 60 per cent.

“So it is about twice what it ought to be,” Browne told the town hall meeting.

Browne led his Antigua and Barbuda Labour Party (ABLP) to victory in the June 12 general elections, removing the United Progressive Party (UPP) headed by Baldwin Spencer that had been in office for the past 10 years.

— CMC

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Antigua and Barbuda"s fiscal deficit surpasses US$100m

Anthony agonises over ways to cut St Lucia fiscal deficit

CASTRIES, St. Lucia, Friday July 4, CMC – The St. Lucia government says it is important to reach a consensus with the public sector unions on ways of dealing with the current EC$76 million (One EC Dollar = US$0.37 cents) fiscal deficit.

Prime Minister Dr. Kenny Anthony says an agreement will be the best signal that can be sent to the financial markets.

Anthony, who is also Finance Minister, had proposed a five per cent cut in the salaries of public servants as a way of helping to deal with the crisis, but this has been rejected by the unions.

Just recently he wrote to the unions expressing the government’s willingness to activate a government negotiating team (GNT), but said he is still awaiting a response.
“There are times I really wish I can explain to the people how difficult and how hard it is for me ideologically and otherwise.

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“I go to bed sometimes and remember that I was a former president of the St Lucia Teachers Union (SLTU) and fought for increased wages for teachers in my time, and here I am at the crossroads dealing with a very difficult situation,” Anthony said.

However he noted that in all major decisions, politicians have to make a judgment as to whether what they are doing is the right thing.

“I have agonised over it and I know in my heart it’s the right thing,” the Prime Minister said.

Anthony observed that he may go down in the history of the SLTU as the leader who may have betrayed the leadership of the union that he once led, nevertheless he said it was a price he was willing to pay for his country.

At the same time, Anthony said there is value in reaching a consensus.

“There is benefit to be gained if we can agree to move forward,” he said, but added that while he is seeking to persuade the unions to make sacrifices, if the effort fails he will have to exercise “the burden of leadership” that was entrusted to him.

Meanwhile, the Trade Union Federation, (TUF) is preparing to break its silence on the ongoing impasse.

A union spokesman confirmed that the TUF, which does not include the powerful Civil Service Association (CSA), plan to hand government a list of its own proposals by Wednesday.

This would represent a response to a letter from Anthony in which he listed two agenda items he wants the discussions to be centred on, salaries and conditions of work and expenditure reduction and wage adjustment.

However the unions remain displeased with Anthony’s insistence that the latter be separate items on the agenda, claiming that the discussion on salaries would involve wage adjustments hence the separation of the two is unnecessary.

All public sector unions have already rejected government’s five per cent wage cut and a three year wage freeze, which government said would help raise EC$18 million.

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Anthony agonises over ways to cut St Lucia fiscal deficit

Consumers received more than $30M in compensation last fiscal year

Consumers received more than $30 million dollars in refunds and compensation during the 2013/2014 financial year following the intervention of  the Consumer Affairs Commission (CAC).  
During the period, the CAC handled 1,499 complaints. Of that figure, 1229 were settled -an average resolution rate of 82 per cent.     
According to Sharon Ffolkes Abrahams, Minister of State in the Ministry of Industry, Investment & Commerce Ministry, these figures indicate the level of  grievances consumers are facing in the marketplace.
Additionally,  Mrs Ffolkes-Abrahams has revealed that 440 cases were investigated by the Fair Trading Commission (FTC), last fiscal year.
These comprised 166 cases that were unresolved at the end of  the previous financial year.   
The FTC has the power to carry out investigations to determine if  any enterprise is engaging in practices that are in contravention of  the Fair Competition Act. 

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Consumers received more than $30M in compensation last fiscal year

Omnibus, other reforms to bring in $4b more taxes in new fiscal year

BY CAMILO THAME Business Co-ordinator thamec@jamaicaobserver.com

Friday, February 14, 2014    

THE Government plans to implement further tax reform — including the removal of most exemptions and all zero rated items for GCT — in the upcoming fiscal year, which begins April 1.

But an Inter-American Development Bank (IDB) study shows that the new omnibus legislation and other measures already put in place should conservatively bring in an additional US$38million ($3.9 billion) in tax revenue next fiscal year (FY2014/15).

The full impact of the reform measures is estimated to be US$125 million, but the multilateral lender projected that just 30 per cent would be realized in FY 2014/15, and that the benefits would gradually increase over the next few years until they are fully realized in 2016/17.

The bulk of the increased revenue from existing tax reform measures in the upcoming fiscal year is expected to come from corporate tax — US$11 million — followed by GCT, US$10.9million and changes to tax incentive laws, which is expected to claw back US$6.9 million from businesses next year alone.

IDB documents accompanying recently approved funding an US$80 million loan for fiscal structural programme for economic growth stated that broader tax reform will become effective at the start of FY2014/15.

“The tax reform should include legislation to modernise income tax, customs tariffs, and social security contributions, including the administration of the National Insurance Scheme (NIS),”said IDB documents, which add that tax and tariff exemptions in all major taxes, excepting for a limited number of specific goods and services, would be greatly reduced.

Changes to GCT include the removal of Government purchases from the GCT zero rate list and a broadening of the the tax base by limiting the zero rate to exports and reducing the number of exempted goods and services.

The IDB document also reiterated that an evaluation of the possibility of further broadening the GCT tax base by including petroleum products within the GCT taxable base is being done.

“Including petroleum products in the GCT requires adjustment of the SCT to ensure consumer prices of petroleum products and its derivatives do not change significantly,” said IDB documents.

On the other hand, depending on the improvements in revenue associated with these reforms, the Government will consider a phased reduction of the statutory rates of the main taxes.

“The Government is considering a prudent reduction in tax rates after FY 2014/15,” the document continued. “This reduction will be subject to improvements in revenue associated with the initial reforms implemented in FY 2013/14 and FY 2014/15.

The IDB study was prepared to estimate the financial benefits generated by the introduction of a set of fiscal reforms aimed at strengthening the country’s fiscal position as well as at achieving the sustainability of public financing and of economic growth.

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Omnibus, other reforms to bring in $4b more taxes in new fiscal year