IMF urges Antigua to increase its tax base
The International Monetary Fund, IMF, says Antigua & Barbuda should increase its tax earnings, which at 16 per cent of revenue is just one percentage point below what the fund says is needed to support the country’s developmental needs.
Antigua, which does not tax incomes, is said to have the lowest tax-to-gross domestic product ratio in the Eastern Caribbean Currency Union.
“What does 16 per cent tell us? It tells us that the tax to GDP is right at the margin, below which we would think that it 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 training programme on economic and financial reporting, conducted by the Thomson Reuters Foundation.
Georgieva said that the IMF takes 15 per cent tax-to-GDP ratio as the threshold below which the tax base is just not enough for the country to function.
“With 16 per cent it’s above this threshold, but barely,” she noted, adding that that leads to three conclusions. The first is that there has to be very strong investment in making sure that tax loopholes do not exist, and that this tax translates into revenues in a predictable manner,” said Georgieva.
“For this usually relying on digital – being able to trace every source of tax revenues and then monitor proper implementation of the tax system is absolutely paramount.”