ST. JOHN’S, Antigua, CMC -The main opposition United Progressive Party (UPP) Friday called for “unified resistance” to the announced plans by the government to increase the 15 percent Antigua and Barbuda Sales Tax (ABST) by two percent.
Describing the planned increase as an “autocratic imposition,” the UPP said that the increase to be announced by Prime Minister Gaston Browne when he delivers the 2023-24 national budget on December 15 is being undertaken without consultation with the public as had been promised by the government.
“The Administration is attempting to appease the public with its references to the zero-rated basket of food items. At the same time, it is downplaying that all other consumer goods and services are subject to the ABST, and the increase in the sales tax will necessarily drive up the cost of living,” the UPP said.
The UPP said it would be consulting with the trade unions and employer organizations, as well as the church and other civil society groups, “on crafting a unified resistance to this unconscionable increase.
“And when a protest action is called, the UPP encourages all public and private-sector workers, consumers, and organizations to let their opposition to this increase be heard and felt.”
A statement issued following the weekly Cabinet meeting noted that officials from the Ministry of Finance, the Inland Revenue Department, the Medical Benefits Scheme, the Antigua and Barbuda Department of Maritime Services (ADOMS), and the Minister of State in the Ministry of Finance and Corporate Governance were in attendance to discuss “options for the 2024 Budget, taking into account that tax revenue to GDP ratio stands at 15 percent”.
It said that the target of the budget officials is to raise revenue to 20 percent of GDP, and the discussion “revolved around items that can be zero-rated and those imported items where the waiver of taxes is not warranted.”
Information Minister Melford Nicholas told the post-weekly Cabinet news conference that “one of the things we had spent some time with the Ministry of Finance officials is looking at various measures that could be used to close that funding gap, the prime one being the increase in the by two percent.”
He said the tax increase is considered appropriate, adding, “We’re still thinking that it is appropriate, and the Ministry of Finance officials have been asked to look at a phased implementation of these measures.”
Nicholas reiterated that the rise in the ABST is necessary due to the forecast increase in the salaries of public sector workers, among other expenses.
“The government made good on a commitment of five percent, and a further nine percent has been agreed with a vast majority of the public sector unions … the implication for these new increases would create a further increase in the fiscal requirements of the government,” he said, adding that the two percent increase is expected to have little to no impact on the cost of essential food items due to many of them being zero-rated.
In September, Prime Minister Browne announced a 14 percent increase in workers’ salaries in the public sector.
According to the Inland Revenue Department, the ABST was introduced in January 2007 and is a value-added tax imposed on the price at which goods and services are sold.
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