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Massive ABST Relief Coming

Massive ABST Relief ComingAntigua 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.

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34 Comments In This Article   

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RE Observer - 2

#34 Out of our Depths » 2012-12-12 21:59

And it is all well and good for the government to announce that they are giving an early Christmas Gift to the public. But the businesses that have to implement this gift, got ZERO NOTICE THAT THE GOVERNMENT WAS GOING TO DO THIS. No phonecalls, no emails, no letters. Business owners learned that this was happening, the same way consumers did, in the press....with two days' notice!
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.
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Out of our Depths

RE Observer

#33 Out of our Depths » 2012-12-12 21:59

Dear Observer, you hit the nail on the head.
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.
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Out of our Depths

Stubborn set of people

#32 Observer » 2012-12-12 20:23

I guess unless the idea doesn't come from them it cannot be good. Christian said"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.” Many times we have said to either take away or lower the ABST to increase sales. Or remove the duties and RRC so that Cost of Living goes down and Sales increases. In both cases you capture more revenue. But he won't listnen to us. This little two day trial is bound to fail because it is nothing permanent and business will not go through the trouble of implementing this. To much work involved. Who will pay for that. Overtime for IT professionals and accountant to change ABST on each item that is taxable. Especially in supermarkets it's hundreds of items. And then to put them back. Sorry but you fail again. Be bold and do the right thing using the same hypothesis.
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Observer

Jane

#31 Elderstates woman » 2012-12-12 19:50

This whole idea sounds like a nancy story and once again wreaks of desperation. How many stores are opened on Sundays? It is time that we as Antiguans stand up and let all these politicians no that they need to stop insulting our intelligence- WE DEFINITELY DESERVE BETTER THAN THIS. MOST PEOPLE WOULD HAVE ALREADY BEEN PAID AT MONTH END (SORRY PUBLIC SECTOR WORKERS) ALREADY ALLOCATED THEIR MONEY AND LOOKING FORWARD TO RECEIVE THEIR DECEMBER WAGES AND THEREFORE HAVE NO DISPOSABLE INCOME AT THIS TIME. I HATE TO SAY THIS BUT PLEASE GIVE ME AN ASPIRIN
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Elderstates woman

@ FNPSR Common Sense

#30 Village Boi » 2012-12-12 16:01

@fnpsr, if my memory is serving me right I think i do remember that post a few months ago, but will said.

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 .
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Village Boi

RE: Massive ABST Relief Coming

#29 name! » 2012-12-12 15:37

electios antics lol
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name!

rates are too high

#28 common sense » 2012-12-12 15:00

If you know the rates are high why not just make the wise decision and just drop the rates. It was ridiculous in the first place!!
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common sense

RE: Massive ABST Relief Coming

#27 Fed Up » 2012-12-12 14:12

Hang on, I'll respond later when I can stop laughing enough to type. Whoever dreamt this one up needs to stop smoking something funny !!!!
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Fed Up

Here we go again

#26 Mr Sabruski » 2012-12-12 13:52

Christian has to be one of the most stupid people I have ever come across.
#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?
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Mr Sabruski

@ Lord Have Mercy

#25 skyewill » 2012-12-12 13:42

I'm not really on nobody side; I was born in St. Johnston’s village my people from Point, Liberta and Potters. I owe those people everything; some went without so I could eat. I have not forgotten. The Lord has been good to me. I would help any government red or blue or even pink as long as the work is in the best interest of my country. I can not strive in a corrupt operation. I go against the grain. I am about getting it done no messing around, no BS. Integrity, Service and Excellence and you fight. Did you get the message about the donkey milk cheese? I know you think I’m kidding but it is true an upscale restaurant puts in on the menu and pays $600 per pound and they will buy all you can produce. Right now it’s only made in the Ukraine.
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skyewill

re: village boi - my take - part 2 & final

#24 fnpsr » 2012-12-12 13:39

While Christian did not go far enough, he seems to support my argument when pressed by CA when he said in part, Quote:
“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.”
Imagine this happening all year long on a permanent basis.

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.”
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fnpsr

re: village boi - my take - part 1

#23 fnpsr » 2012-12-12 13:36

Village Boi, I agree with your ideas. I have opined before here on CA that the ABST should be cut to 7.5 %. There should also be no tax on food and a standard fee of 10 % on imports, except for food, should be implemented at the port. These measures would greatly improve the economic situations in Antigua. It would create a stimulative effect like you have never seen before. And the good thing about it, it is permanent. Of course the savings in the form of lower prices will have to be passed on to the consumers. This must be rigidly enforced!

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.
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fnpsr

RE: Massive ABST Relief Coming

#22 labourite » 2012-12-12 13:33

2 days?why not the entire xmas season.Is this some kindd april fools day?
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labourite

Where were they?

#21 Dig It » 2012-12-12 13:13

Just find it "amazing," after all these of "sleeping," the business community decides to settle for two days of 5% to generate profits in this "sluggish economy" with many consumers trying to make "five-quarters- out-of-dollar!" When will they asked the GOAB to do more in helping them in creating the environment to boost the economy. Just two days out of the will not cut it for them. If you ask those businesses that " closed" down, they will tell you that this relief or any, is too late! Let us be serious with ways to "circulate" money in the economy a mnemoand perhaps grow it!
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Dig It

RE: Massive ABST Relief Coming

#20 ANTIGUAN WOMAN » 2012-12-12 12:26

We need a cut in taxes period........N ot just for two days,but P.E.R.I.O.D. We need a cut in our electricity FVC which the WPP supposedly would have acheived,we know now that was a hugh lie all along.Two days will not do it,you have robbed us blindly for the entire yr,so now are we supposed to look under some rocks and find the money ,then jump for joy?? This will not do it,you,ll have lost your way,CALL THE ELECTIONS EARLY IN THE NEW YR,that would be a welcoming announcement instead of this attempt to soften the blows inflicted for almost 9yrs. How Stuoid do you think we are.
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ANTIGUAN WOMAN

Reduction on both ends the front and back

#19 1ken » 2012-12-12 12:13

Will the ABST be reduced at Customs on the Saturday and Sunday also?
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1ken

Its like thise ppl in government dont leave here in Antigua and Barbuda

#18 Village Boi » 2012-12-12 11:50

Sorry, but this incentive aint going to do **! You know why? 1. Most ppl get paid at the end of the month and by the middle of the month the money is finish or almost finish, those that get paid every week or 2 weeks have already budget their money already. Heard is whats going to happen after this execise they r going to say it was succesful end of story.

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 ........
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Village Boi

RE: Massive ABST Relief Coming

#17 Educator » 2012-12-12 11:42

The relief of November salary would be welcomed now!!!!!
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Educator

Caribarena stop the sensational crap

#16 Dr. Dredd » 2012-12-12 11:39

What massive relief? Practically no notice. 10% of on Saturday and Sunday when most places are closed. Many have still not been paid.
This is another Lovell PR effort and Caribarena, suprisingly, has been sucked in.
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Dr. Dredd

Junie

#15 ABST Relief Coming » 2012-12-12 11:21

lovell you have sick when it come to taking country out of the problem it is having at this time, why they have you doing this job I do not understand? You give the people of A & B just 2 days tax at 5 from 15 when you have state like Florida giving its people a full months tax free and it do not charge its people 15% but 7% you are sick in the head. The consumption drives the economy, for a person that say that he went to school please learn from others but not from been a hard head. the people of Antigua and Barbuda can not pay what you want them to pay, it is hard on them. You have to reduce the taxes not just for now but to encourage more spending that what are been done in bigger country or can't you see? you need to use your lack of lack of imagination. I think it was part of your job economic development or you can not do the job which one is it?
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ABST Relief Coming

RE: Massive ABST Relief Coming

#14 zzzzz » 2012-12-12 09:56

lovell if consumption drives the economy if you reduce the taxes you will encourage more spending which will be beneficial for the economy in the long run. the tax base is already eroded. you lack imagination as a finance minister resorting to the lazy approach by taxing taxing taxing. what about the other part of you porfolio economic development. creating jobs and creating more avenues for adding to the base. like Errol you seem to do well with tax collection and wasting, but the development side proves you are a dismal failure.
:zzz :zzz instead of a mere two days you might even look to reduce the ABST on a permanent basis.
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zzzzz

@ SKYEWILL

#13 Lord Have Mercy » 2012-12-12 09:43

My Brother, "a drowning man will grasp at a straw." The UPP is simply out of its depths.

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.
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Lord Have Mercy

pathetic

#12 dollar » 2012-12-12 09:40

from 12:01 am? want to see how many places, especially restaurants will apply this after 12.01 am on the 15th!! then is for 2 days over a weekend?!??! is this for real??? with a 3 days notice???!!?! is just like taking the ** out of us!!! about doing it until the year ends to see the real effect?
Just pathetic.
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dollar

RE: Massive ABST Relief Coming

#11 Freedom of Speech » 2012-12-12 09:25

I still have NOT gotten paid, so I cannot spend what I don't have :-?
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Freedom of Speech

Ignorance

#10 Prophet » 2012-12-12 09:12

Ho can one spend without being paid, I see Government encouraging lots of hunger and theft.

God only knows how...
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Prophet

RE: Massive ABST Relief Coming

#9 SlyThatGuy » 2012-12-12 09:07

To cut sales tax from 15% to 5% for a mere two days is not good enough. I mean,if the goal is to get consumers(espec ially those on the lower end of the income scale)to buy more stuff,it would seem like a much better idea to keep it that way for the remaining of the season. And they should even consider keeping it as low as possible after the season,because it will help the economy much more in the long run.
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SlyThatGuy

too late too late shall be the cry...

#8 Pied Piper » 2012-12-12 09:04

Is this for real? couldn't this have been informed about 2 weeks ago!

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. :-*
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Pied Piper

RE: Massive ABST Relief Coming

#7 Morris » 2012-12-12 08:46

I am not convinced that this knee ** proposal on those slow days, especially since many gov't workers have not yet been paid, would bring much success. However, I do believe that a wee kly no ABST every month would be a much better approach, but workers have to be paid on time.
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Morris

Stupidity!

#6 Onlooker » 2012-12-12 08:42

Though I commend the Government for trying to stimulate the economy by reducing the ABST, there obviously has been no real thought into this idea. From a laymans prespective, if I am only paying 5% on Saturday and Sunday, why will I go buy anything prior to that....I will wait. Therefore sales for the days leading up to Saturday and Sunday will be lower than normal reducing the ABST intake. From a business point of view, am I going to open the extra day (Sunday) to take advantage of "additional sales" when there is no money in circulation.... .why not for once, can Government come to the aid of the businesses and people of Antigua and Barbuda with something worthwhile..... why not run this for the season!!! I give this idea and the people behind it a FAIL!
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Onlooker

Lovell

#5 Ten » 2012-12-12 08:37

IMF is the Boss not Mr lovell
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Ten

giving it a new twist”.

#4 skyewill » 2012-12-12 05:43

He is right, Antigua needs a new twist. These people are further along than we think. It is some form of advance insanity. They really believe Antiguans are nincompoops. FIRST THEY SAID: The expectation is that we will not be foregoing any revenue. THEN THEY SAID:
“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?
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skyewill

Election?/????? ??????

#3 Oh Please » 2012-12-12 05:42

OH PLEASE ELECTION IS HERE!!!!!11
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Oh Please

RE: Massive ABST Relief Coming

#2 1234 » 2012-12-12 05:29

Does DAT MEK SENSE? Government workers (the largest % of persons employed) and pensioners have not gotten paid and the UPP GOVERNMONT go put on a reduce tax day when the biggest % of the employed populous have not been paid. Why not wait so that everybody can enjoy the savings.
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1234

Hopefull It Will Go Well

#1 No Last Name » 2012-12-12 05:29

This initiative should help stimulate some Christmas business for the private sector.
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No Last Name

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