KINGSTOWN, St. Vincent, St. Vincent, and the Grenadines government has presented a EC$1.44 billion (One EC dollar=US$0.37 cents) budget to Parliament with Finance Minister Camillo Gonsalves announcing the implementation of a number of the fiscal policies approved last year, but were shelved because of the novel coronavirus (COVD-19) pandemic and the April 2021 explosive eruption of La Soufriere volcano.
The Estimates of Income and Expenditure were approved in December last year, and Gonsalves said, “budget 2023 is an optimistic and ambitious plan to place St Vincent and the Grenadines squarely on the road from recovery to resilience,” adding it is “a blueprint for sustainable, people-centered development” in St Vincent and the Grenadines.
“The fiscal measures for budget 2023 will focus on the reduction of income taxes for both individuals and corporations, increases in user fees for some services to maintain some level of parity with the cost of delivering the services and the airport service charge,” Gonsalves told Parliament on Monday evening as he delivered the budget statement.
As a result, the government will this year return the airport departure tax to EC$100, up from the EC$50 reduction during the height of the pandemic, and implement the increase of the overstay fee as well as maritime administration, agricultural services, and Fisheries Division fees.
Gonsalves noted that the government had reduced taxes from 30 to 20 percent and increased the threshold from EC$20,000 to EC$22,000 annually.
He reminded lawmakers that in June 2020, amid the COVID-19 pandemic, the airport service charge was reduced by 50 percent and that the measure was undertaken as a symbolic means to encourage regional travel with the collapse of the inter-regional airline LIAT.
“Travel within the region is proving to be quite challenging. The existing airlift capacity on various inter-island routes is deficient, leading to great inconvenience to the traveling public.
“Additionally, as travel restrictions internationally and regionally have been rolled back and persons are traveling more freely, although I see the United States has re-imposed the vaccine requirement to enter the US, we believe that it is propitious to return the airport service charge to EC$100,” Gonsalves said.
The Finance Minister said that effective May 1, the airport service charge would revert to $100 or US$40.
“An additional four million dollars in revenue is expected from this measure. These funds will flow directly to the Argyle International Airport to bolster the operating bottom line of the company,” he told lawmakers, noting that the overstayers fee under the Immigration Restriction Act is currently EC$25.
In Budget 2020, this fee was increased to EC$100 but still needs to be implemented along with the extension of stay fees, which was increased to EC$100.
“As a result, most persons who wish to stay longer in the country pay the lower overstay fee than they do to apply for an extension of stay because one is $25 and one is $100.
“To address this act of arbitrage, the overstayer’s fee will be increased to $100 with effect from February 1, 2023,” he told Parliament, adding, “this measure is expected to yield EC$100,000 in additional revenue.”
Gonsalves said the revenue measures for which implementation was deferred in the 2020 budget were maritime administration fees, hospital fees, radiological fees, laboratory fees, dental fees, fees for agricultural services, and Fisheries Division fees.
“From that list of differed measures, the following will be implemented in budget 2023 with effect from February 1; the maritime administration fees, the fees for agricultural services, and the Fisheries Division fees…
“The health-related fees will be further deferred, pending the completion of the comprehensive review of user fees undertaken as a part of the Health Sector Resilience Project. And as such, when honorable members receive their copies of the speech, they will see the maritime, agricultural, and fisheries division fees, which essentially pay for the service being provided in those respects,” Gonsalves told legislators.
Opposition Leader Dr. Godwin Friday is expected to respond to the budget statement on Tuesday.
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