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Tax Hikes forecast to grow government revenue in 2024

The government of Antigua & Barbuda is set to bolster its revenue for 2024 through targeted tax measures like the introduction of a sin tax, a hike in money transfer fees, and an increase in property taxes.

The government of Antigua & Barbuda has implemented a series of tax adjustments that it believes will allow it to meet its fiscal obligations next year. 

The overall budget stands at $1.89 billion dollars – slightly higher than last year’s budget of $1.8 billion. A 9% per cent salary increase in public sector wages at an additional $32 million monthly and an up to 14% increase for pensioners are to account for the higher figures. 

A breakdown of the budget reveals a significant increase in recurrent expenditure from $1.04 billion in 2023 to $1.1 billion in 2024. 

2023 Recurrent expenditure ($1.04 billion)2024 Recurrent expenditure ($1.1 billion)
Wages and Salaries$425.9 millionWages and Salaries$461.1 million
Goods and Services $183.5 millionGoods and Services $210.6 million
Transfers and Grants$163.9 millionTransfers (inclusive of SSS, MBS, SLBMC)$295.6 million
Statutory Contributions $41.1 million
Pensions and Gratuities $74.1 millionPensions and Gratuities$74.9 million
Interest Payments$146.5 millionInterest Payments$131.9 million
Chart comparing 2023 expenditures with 2024 expenditures

The government also anticipates needing $196.3 million to maintain its offices and properties – $130.6 million of which is geared towards infrastructural development, $82.8 million is for road rehabilitation, and $33.5 million for building repairs and maintenance. 

Government spending is anticipated to exceed its revenue by $80.2 million next year but it is banking on stricter tax collection to keep those expenses at bay. The government anticipates that the majority of its revenue – $1 billion – will be derived from tax collection.

Tax Adjustments

The major contributor to these revenues is expected to be the Antigua and Barbuda Sales Tax (ABST) which is expected to contribute $413.6 million. Next year, the ABST will stand at a total of 17%, following a 2% increase across the board including from the tourism sector which currently attracts a rate of 14%. “We will also end the concessionary ABST rate applicable to several transactions most notably in the tourism sector,” said prime minister Gaston Browne.  The tax will also apply to online streaming services. 

Further, the prime minister has announced a discontinuation of concessions on consumer tax for hotels. “For ongoing routine business operations to include consumables, these concessions will be discontinued.” He warned all hotels not to send any requests for concession waivers to his administration.

A 10% excise tax will also be applied on alcohol, tobacco and cannabis products. Additionally, there will be a 3% increase in the money transfer levy which will impact residents who are sending and receiving money abroad. Homeowners with properties valued at $3 million or more will also see an uptick in their property tax rates.

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The collection of direct taxes, comprising Corporation Tax, Property Tax, and Unincorporated Business Tax, are also expected to significantly contribute to government revenue, yielding an estimated $156 million.

Ministry Allocations

Meanwhile, the Ministry of Education emerges as the biggest beneficiary of this year’s budget with $184.2 million earmarked to address the diverse needs of the sector in 2024. Falling closely behind is the Ministry of Health, Wellness, Social Transformation and the Environment with $160.5 million.

Ministry of Foreign Affairs, Agriculture, Trade and Barbuda Affairs   $52.7 million
Ministry of Housing, Works, Lands and Urban Renewal$114.6 million
Ministry of Education, Creative Industries and Sports  $184.2 million
Ministry of Health, Wellness, Social Transformation and the Environment  $160.5 million
Ministry of Tourism, Civil Aviation, Transportation, and Investment$37.6 million
Attorney General’s Office and Ministry of Legal Affairs, Public Safety, Immigration and Labour$114.4 million
Ministry of Information Communication Technologies (ICTs), Utilities and Energy  $15.3 million
Table outlining ministry allocations for 2024

The Office of the Prime Minister has been allocated $42.7 million and the Ministry of Finance, Corporate Governance and Public Private Partnerships $134.9 million. Included in the amount budgeted for the Ministry of Finance is $9.5 million for the Barbuda Council – an increase from last year of $3 million. Browne increased the Barbuda budget with hopes of collecting more sales tax in that constituency next year.

The budget debate has been set for Tuesday December 19th from 9:30 am. This session will provide an opportunity for parliamentary discussion and scrutiny of the proposed budget for 2024.

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