CASTRIES, St. Lucia, CMC – Prime Minister Phillip J. Pierre has presented an EC$2.189 billion (One EC dollar = 0.37 cents) budget to Parliament on Monday night, confident that sound policies, strong fiscal management, and decisive action will allow his government to “competently navigate” the current global environment.
Pierre, presenting the Estimates of Revenue and Expenditure ahead of his policy statement in April, told legislators that, notwithstanding the uncertainty of the geopolitical environment, he remains “optimistic that this year will be one of growth.
“This year’s budget estimates are based on projections for continued economic growth, supported by improvements in performance in the tourism sector, increased public and private sector construction activity… and the expansion in domestic economic activity through growth in the orange and youth economy.”
Pierre said that, in the 2026-2027 budget proposals, the government will endeavour to strengthen the country’s resilience in preparation for the negative effects of climate change and economic shocks.
“Every effort will be made to improve overall productivity in the efficiency and delivery of government services. The private sector will be expected to assist the government’s efforts to improve St. Lucia’s ease of doing business with it.”
He said to achieve these outcomes, the government will reduce unnecessary and unplanned current expenditure by building efficiencies in its operations, reduce expenditure on energy, undertake strategic social expenditure in health and social services, in citizen security, in education, in sports and youth development, to improve the quality of life for citizens.
Pierre told Parliament that the government expects economic expansion to continue in the upcoming year and remains optimistic based on proposed investment in the tourism sector. “However, we will be vigilant and make the necessary adjustments if needs be, depending on how global geopolitical events unfold,” he said.
He said the recurring revenue of EC$1.7 billion is projected to increase by EC$128.5 million over the approved estimates for 2025-2026, compared with the outturn for the preceding year, 2024-2025.
He said recurrent revenue will increase by EC125.1 million, or 7.7 per cent, and that the total amount projected for recurrent revenue will be EC$1.58 billion in tax revenue (90 per cent) and EC$175.2 million in non-tax revenue.
Pierre said that tax revenue is forecast to increase by 6.5 per cent compared to the outturn for 2025-2026, while non-tax revenue is expected to increase by 20.2 per cent compared to the outturn for the last fiscal year.
He said that the increase in tax revenue will be influenced by continued projected economic activity expansion, increased tax compliance, and the use of the ongoing tax amnesty programme by taxpayers.
The increase in non-tax revenue is projected to be influenced by Citizenship-by-Investment (CBI) inflows, he added.
Pierre said taxes on income and profits are projected to be EC$406.1 million or 26.7 per cent above the revised estimates of 2025-2026, adding “this category is forecasted to perform well due to the continuation of the tax amnesty programme and the ongoing expansion of the economy.”
He said that revenue from income tax and corporations is expected to generate EC$194.9 million for the financial year 2026-2027, representing a 9.6 per cent increase over the year-end outlook for 2025-2026.
Revenue from the income tax on individuals is estimated at EC$172.2 million, representing a 1.4 per cent increase from the 2025-2026 projected outlook, and income tax arrears are projected at EC$57.2 million based on responses to the tax amnesty programme.
“Let me assure you, the government will not give up on the collection of tax arrears,” Pierre said, telling legislators that Customs duties will bring in revenue of EC$344.3 million.
“This category includes excise taxes, cargo throughput charges, and import duties. Of the total amount to be collected, EC$177.6 million is expected to come from import duties, EC$177.2 million from excise tax, and six million from passenger facility fees.”
He said taxes on domestic goods and services are estimated at EC$812.9 million, which is 9.2 per cent above the projected outturn for 2025.
“This category includes value-added tax (VAT) on domestic activity collected by the inner revenue. Receipts from VAT collected by the inner revenue account for 50 per cent and are projected at EC237.1 million, which represents a 1.3 per cent increase relative to 2025-2026.”
Pierre said that VAT from international trade transactions collected by the Customs and Excise department is projected to yield EC$235.7 million in 2026-2027, which is 8.8 per cent, or EC$216.6 million, above the 2025-2025 outturn.
He said that the health and security levy will remain at 2.5 per cent and is projected to increase by EC$11.9 million above the 2025-2026 outturn, reaching EC$53.3 million for the new fiscal year 2026-2027.
But he acknowledged that health expenses are estimated at EC$259.3 million and citizen security expenses at EC$200.4 million.
“Mr. Speaker, a simple calculation, arithmetic that will show that total expenses for health and security will be projected to be EC$459.7 million, while collections on health and security levy will be EC53.3 million.
“Mr. Speaker, we continue to increase spending on health and security in our country. This month, we commissioned the swift justice programme to reduce the backlog of over 1,000 pending criminal cases in the system, which had built up over several years. Later this year, the new St. Jude Hospital will receive patients at the facility, a milestone in the delivery of health care for St. Lucia.”
Pierre said that the recurrent expenditure of EC$1.750 billion, representing a 9.5 per cent increase over the amount approved in 2025-2026, or EC$151.7 million.
Pierre said the recurrent expenditure represents 80 per cent of total expenditure and that the increase in expenditure is due to higher wages and salaries, goods and services, transfers, interest charges on debts, operating expenses related to planned (4:57) project activities, and higher renter payments for government offices.
He said wages and salaries for both government operations and projects account for 29 per cent of total expenditure, and that the wage bill continues to increase as the government endeavours to meet its obligations to workers.
“For the upcoming budget, a two per cent salary increase is included in keeping with the collective agreement for 2025-2028. Wages and salaries will increase by 4.9 percent, or EC$29.8 million, over the approved figure for 2025-2026, and by 5.2 percent over the year-end outlook, EC$638.1 million.
Pierre said debt service is expected to increase in the next term due to the end of moratoriums on previously contracted debts.
“For the fiscal year, EC$291 million is allocated to debt service, representing an increase of EC28.2 million or 7.8 per cent when compared to the year-end outlook for 2025-2026,” Pierre said, adding that EC$251 million is allocated to interest payments and EC$140 million to principal repayments.
and then  budget to Parliament on Monday night){kind=link}