SANTIAGO, Chile, CMC—The International Monetary Fund (IMF) says Antigua and Barbuda should increase its tax earnings. At 16 percent of revenue, this is just one percentage point below what the IMF says is needed to support the country’s developmental needs.
St. John’s does not tax income and is said to have the lowest tax-to-gross domestic product (GDP) ratio in the Eastern Caribbean Currency Union (ECCU).
“What does 16 percent tell us? It tells us that the tax to GDP is right at the margin, below which we would think is insufficient to support the country’s priorities,” IMF Managing Director Kristalina Georgieva said at a news conference.
She fielded questions from journalists attending an IMF-sponsored economic programcial reporting training program conducted by the Thomson Reuters Foundation.
Georgieva said that the IMF considers a 15 percent tax-to-GDP ratio the threshold below which the country’s tax base is insufficient to function.
“With 16 percent, it’s above this threshold, but barely,” she noted, adding that this leads to three conclusions.
The first is that there has to be a solid investment in ensuring that tax loopholes do not exist and that this tax predictably translates into revenues.
“For this, we usually rely on digital technology. It is paramount to be able to trace every source of tax revenues and then monitor proper tax system implementation.”
The IMF head said it is also essential that the country consider whether the taxes collected are enough or whether it should do more.
“And if it decides that it should do more, how could that be done?” Georgieva said, noting that the different sources of tax revenue include taxes on profit, income, property, and inheritance.
“It is important to examine these different ways to increase tax revenues and decide what would be most appropriate for the context of a small, relatively small economy.”
Georgieva said the third issue that Antigua and Barbuda needs to look into is whether there are ways in which the economy may speed up economic growth.
She noted that the economy grew by 5.9 percent in 2023, with growth for 2024 projected at 6.1 percent, trimming to four percent in 2025.
“So you have relatively good performance. And the question is, could more be done to increase revenues based on this performance?” Georgieva said.
“You can broaden the sales tax—one possibility. You can introduce a tax on alcohol or tobacco, which is unsuitable for your health. And you can say, ‘Well, we want to have a sound custom system and, on that basis, collect more revenues.
“My answer would be that you’re barely there with 16 percent. It would help if you considered increasing your tax base. And certainly, since you’re barely there, please collect every penny of due taxes.”
and then  says Antigua and Barbuda should increase its tax earnings. At 16 percent of revenue){kind=link}