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Economy
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Wednesday, 12 December 2012 02:30
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By caribarena news
Antigua St. john's - Government on Tuesday announced that it will reduce the Antigua and Barbuda Sales Tax (ABST) rate from 15 percent to 5-percent on Saturday December 15 and Sunday December 16 meaning this coming weekend.
A press release from the Ministry of Finance and the Economy says “reduction will apply to all types of goods sold in Antigua and Barbuda during the period from 12:01 am on December 15th 2012 to midnight on December 16th 2012.
According to the statement, the decision follows consultations with the business community and technicians in the Ministry of Finance and the Economy.
The aim, it says, is to provide a boost to the local business community, particularly for the Christmas season.
Efforts to contact Finance and Economy Minister Harold Lovell for further comment were unsuccessful. But Caribarena did get to speak with Everett Christian, manager of the Revenue Reform Project in the Finance Ministry.
We began by asking him whether there was any particular reason why the mid-month days of 15th and 16th were chosen also coming, as they do, exactly before the December 17th date when Finance Minister Lovell is due to present the 2013 Budgetary Estimates in Parliament.
“We have been engaged in discussions with the Employers Federation about various measures that could be taken in an attempt to stimulate economic activity, and one of the recommendations that they put forward was to have an ABST-free day …” he explained.
Christian said the Ministry favourably considered the request, although not going along exactly with what the Employers Federation recommended instead, to use his words, “giving it a new twist”.
Insofar as the timing is concerned, Christian said “We decided to do it before the end of the year, and we didn’t wish to wait until next weekend, which would be into the Christmas weekend. So it’s not like we specifically selected these dates, but if we don’t do it now, it would not be likely until the new year; and then it wouldn’t have the effect for the Christmas season as the business people had recommended to us.”
Asked whether the ABST reduction would not have a limited commercial impact because of its placement on a weekend when many businesses would be closed, Christian, without hesitation, disagreed.
“When we first looked at it within the Ministry, we were thinking of only extending the facility to groceries and supermarkets.
That was the initial thinking, and this is where the Saturday and Sunday came into play. But subsequently we decided to extend it to all retail outlets, so that it would cover all goods; not services, let me stress, but goods.”
Quizzed about the amount of revenue Government would be foregoing as a result of this two-day slashing of the ABST by two-thirds, Christian said: “The expectation is that we will not be foregoing any revenue, but we would not be able to tell that until after the actual event.”
Pressed to elaborate on that optimistic projection, he stated: “The hypothesis we are working on is that the increased volume over the two days at the lower rate will compensate for what revenue that would have normally been generated if the rate had stayed at 15 percent. But only after the event will we be able to tell whether or not that proves to be accurate, and if it had the intended impact.”
Christian did not want to comment on whether the outcome of ABST-reduction-weekend could inform a review of the tax which many claim has worsened the economic woes that have befallen Antigua and Barbuda in the last four years.
34 Comments In This Article
RE Observer - 2
So this ABST that businesses are meant to be giving away this weekend...is the government going to reimburse businesses, that already paid the ABST at the port, for it? Can a business submit the bill, which IT technicians have charged to do system customisations to tax at 5% for 2 days, to the government for reimbursement?
This government thinks nothing through. And we the people are the only ones who suffer as a result.
Out of our Depths
RE Observer
But instead of hundreds of items that need to have their prices changed in supermarket systems...try thousands. In the bigger supermarkets, on average 15,000 different items.
Inland Revenue has failed to pay most businesses their money when what they paid at the port (before they can even clear the goods) is more than what they have collected from customers in ABST, in any given month. They have owed, and continue to owe, many local businesses, a lot of money over the years.
Out of our Depths
Stubborn set of people
Observer
Jane
Elderstates woman
@ FNPSR Common Sense
Ppl cant dear make that statment that the government will lose revenue because they will need to ask the government is it making any revenue at this point of time if it has to go to IMF for a loan, tell me now..... the answer is NO!
Ppl r out of work so less money i being spent and less taxes being paid so at the end the government will lose and the ppl too.
If there is a cut in the taxes there will be more money spent and over time businesses may expand and new investment comes in because of the tax cuts and that will mean more jobs and a increase in the tax contribute to the government.
U know what kills me and get me upset is if i can sit down and see it that way along with many others, why the ppl that we employed to do a job cant see it , I know we cant always get what we want or need at times but ppl a ball and the government aint doing nothing .
Village Boi
RE: Massive ABST Relief Coming
name!
rates are too high
common sense
RE: Massive ABST Relief Coming
Fed Up
Here we go again
#1, he got the idea from St Kitts, they are going to do something similar.
#2, I would love to know how the IRD will be able to handle the sudden changes,they can't even collect what's owed now.
#3, who going to pay for the merchants to change the configuration of their systems to enable this stupidity.
Christian and the rest of the inept need to be replaced. Is this fool still chairman of SS?
Mr Sabruski
@ Lord Have Mercy
skyewill
re: village boi - my take - part 2 & final
These measures will also reduce the cost of living on the island, encourage locals to go into business; provide job opportunities for the unemployed and would attract outside investors as the place in the Caribbean to do business. These measures will also alleviate some of the stress on the fragile Tourism Product.
“Let’s fix the little things with RWE before we attempt to fix the big things.”
fnpsr
re: village boi - my take - part 1
Some will say that the government will lose revenue. While this many be so initially, over time, the lost revenue will be made up and even increase. When folks have more money to spend, they will buy more and the businesses will turnover their inventories faster, necessitating them to replenish inventories more often. Additionally, when businesses make more money, they will hire more workers sand will pay additional corporate taxes on increased revenues.
fnpsr
RE: Massive ABST Relief Coming
labourite
Where were they?
Dig It
RE: Massive ABST Relief Coming
ANTIGUAN WOMAN
Reduction on both ends the front and back
1ken
Its like thise ppl in government dont leave here in Antigua and Barbuda
What the Government need to do to boost the economy is to cut the ABST in half to 7.5% or toput it at 10% for the next 2 to 3 years,so that ppl can have a little extra cash in hand to spend and or save that would stimplate the economy.
What i see here is that the government is trying to make alot with little and it cant work. The economy is bad and u cant expect to leave taxes like the ABST at 15% and expect to archive growth and to get a stimpulated economy......Yo u got to easy the stress and strain on the ppl ........
Village Boi
RE: Massive ABST Relief Coming
Educator
Caribarena stop the sensational crap
This is another Lovell PR effort and Caribarena, suprisingly, has been sucked in.
Dr. Dredd
Junie
ABST Relief Coming
RE: Massive ABST Relief Coming
zzzzz
@ SKYEWILL
ALP was in the same position in 2004, that is why ALP did not properly finance the election campaign in 2004. They went through the motions, but the plan was to to loose for one term like in 1971. The did not bank on UPP holding on to power with its teeth.
Lord Have Mercy
pathetic
Just pathetic.
dollar
RE: Massive ABST Relief Coming
Freedom of Speech
Ignorance
God only knows how...
Prophet
RE: Massive ABST Relief Coming
SlyThatGuy
too late too late shall be the cry...
I am sure that Government workers especially teachers and others who got their November Salary has already paid their over dued bills with interests etc....
I am not saying it was not a good incentive but next time try advertising this a bit earlier and you would see the potential positive returns.
As a matter of leave the 5% ABST on healthy goods, life styles and services etc. and put it at 15% or increase it on goods and services that most likely help you go to your grave faster like sodas, cigarettes, alcohol, these ragga-ragga-jam sessions and fetes, etc. This way you not only giving people opportunities to spend their money but you also trying to alleviate financial strains on other important and prudent infrastructures and life styles such as health, medical and varying others.
Pied Piper
RE: Massive ABST Relief Coming
Morris
Stupidity!
Onlooker
Lovell
Ten
giving it a new twist”.
“The hypothesis we are working on is that the increased volume over the two days at the lower rate will compensate for what revenue that would have normally been generated if the rate had stayed at 15 percent. IF THAT IS THE CASE: would it not be the case everyday?
skyewill
Election?/????? ??????
Oh Please
RE: Massive ABST Relief Coming
1234
Hopefull It Will Go Well
No Last Name
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