KINGSTOWN, St. Vincent, CMC – Opposition Leader Dr. Ralph Gonsalves is expected to lead off the debate in Parliament on Tuesday after Prime Minister Dr. Godwin Friday presented an EC$1.9 billion (One EC dollar=US$0.37 cents) to lawmakers on Monday.
The fiscal package, the first by the New Democratic Party (NDP) administration since it came to office following the November 27 general elections last year, contains no new taxes, with Friday, who is also Minister of Finance, saying that his administration will focus on collecting existing taxes.
Friday said that his Government will improve the collection of existing taxes, including property taxes, and reduce concessions granted by the Cabinet, which amounted to EC$624.1 million between 2022 and 2025.
Friday told legislators that the scale of import concessions granted between 2022 and 2025 has imposed a substantial and growing fiscal cost on the state, adding that the EC$624.1 million in forgone revenue amounted to 30 per cent of the total value of concessional imports.
“In 2025 alone, the foregone revenues amounted to EC$152.3 million and equated to 64% of all revenue collected from taxes and charges on imports (EC$238.7 million).
“Put plainly, more than half of the revenue we should have collected at the border was given away through concessions. This level of revenue loss is no longer sustainable,” Prime Minister Friday said.
He said a 20 per cent reduction in total import concessions, applied uniformly across categories, would generate an estimated additional EC$30.4 million in government revenue each year.
“This figure is derived directly from the 2025 revenue loss and demonstrates that even a modest and disciplined rationalisation can create meaningful fiscal space.
Prime Minister Friday said this revenue gain can be achieved without outrightly abolishing concessions.
“Instead, it can be delivered through: Targeted priority sectors; tighter eligibility criteria; and stronger oversight, particularly where concessions are discretionary,” he said, adding that special Cabinet concessions alone accounted for a significant share of the increase in concessions over the period 2022-2025.
“More disciplined management in this area would therefore deliver disproportionate fiscal benefits, without undermining productive investment,” the Finance Minister said, noting that the estimated EC$30.4 million in additional annual revenue could be redeployed strategically, including to reduce the fiscal deficit and borrowing needs.
He said the funds would also go toward strengthening priority social spending in health, education, and social protection, or toward increasing capital investment without raising tax rates.
“In the context of fiscal discipline and debt sustainability, a 20 per cent reduction in import concessions represents a high-impact, low-distortion policy option.
“It strengthens revenue mobilisation, restores fairness at the border, and preserves incentives that genuinely support productive investment and inclusive growth,” Prime Minister Friday said.
He said that a central pillar of revenue reform over the medium term is strengthening the property tax system, which he said remains one of the most underperforming and inequitable components of the tax framework.
He noted that the property tax regime was reformed in 2008 to adopt market value as the basis for assessment, replacing the outdated annual rental value methodology.
However, the current valuation list, implemented in July 2013, remains in force despite significant changes in market conditions over the past decade.
The prime minister said that under the Valuation and Rating Act of 2012, the minister is empowered to order the preparation of a new valuation list.
He said the absence of a revaluation since 2013 has resulted in systematic undervaluation of properties, erosion of the real property tax base, inequities between taxpayers, and persistent revenue leakage.
“In addition, a substantial number of properties remain unregistered, further constraining collections and weakening compliance,” Friday said, adding that the Government will therefore commence a nationwide property registration programme to expand coverage of the tax roll, and a comprehensive national property revaluation exercise.
“These reforms will broaden the tax base without increasing rates, enhance fairness, strengthen compliance, and generate sustainable revenue to support fiscal consolidation and local service delivery,” Friday said.
Regarding the tax and customs administration, the prime minister said that revenue sustainability depends not only on tax policy but also on administrative capacity and enforcement discipline.
Friday said strengthening the effectiveness of the Inland Revenue Department and the Customs and Excise Department is central to this Government’s revenue strategy.
He said that at the Inland Revenue Department, the full digitisation of tax administration is underway through the implementation of a modern Tax Information Management System (TIMS) under the Caribbean Digital Transformation Project. By 2027, all major tax types will be integrated into a single digital platform, once fully operational.
In parallel, the Tax Administration Act will be fully enforced; audit capacity will be strengthened, including joint audits with Customs and Excise; and tax arrears collection, particularly for PAYE and VAT, will be intensified.
He said that at the Customs and Excise Department, the development of the Vincy Single Window for Trade Facilitation (VSWiFT) will integrate 16 trade-related government agencies into a single digital interface.
“This reform will reduce clearance times and transaction costs for traders; improve risk management; strengthen revenue collection; and enhance transparency and compliance,” the prime minister said.
He said an updated Customs (Management) Act will also be enacted to strengthen post-clearance audits, advance rulings, and penalty provisions.
“Together, these reforms treat administrative efficiency as a form of revenue enhancement, not through higher rates, but through better governance,” Friday told Parliament.
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