Government urged to review investor incentives scheme

Antigua and Barbuda is being urged to review its investor incentives in order to tie them to performance instead of having them wholly frontloaded.
The advice came on Friday from Timothy Antoine, the governor of the Eastern Caribbean Central Bank (ECCB), during a press conference to provide an update on the bank’s work and the country’s economic outlook.
According to Antoine, too often investors fail to deliver on their promises.
“I’m not sure when last Antigua and Barbuda did a comprehensive review, I would encourage that be done.
“Our region is used to giving some very long tax holidays; I am minded to move away from that and move towards a system where we give a facility where you get a tax write-off for actual expenditure. In other words, rather than give you simply a 20 or 25-year holiday, you get a write off against … actual investment,” the central bank governor stated.
According to Antoine, sometimes you hear about plans to invest tens of millions of dollars and create hundreds of jobs and then nothing materialises even though they would have received the tax breaks.
He added that it was a scenario that played out across the currency union.
“You don’t want a situation where you’ve tied up an agreement for an extended period of time but you’re not making the investment and then after a while you either sell the agreement, you speculate with it or then you change the company after five, 10 years and then you ask for more concessions without delivering the benefits,” Antoine said.
 Although he acknowledged that incentives were necessary, given the global competition for investment dollars, the governor insisted that by tightening up in that area the government revenues could be improved.
“That’s an important thing because to the extent that government improves revenues it then gives the government the wherewithal to do other things in the economy like fix roads, invest more in health, education, and some of the infrastructure issues that we need to address,” the banking official said.
He added that the ECCB has “started the conversation” with the government on the adoption of fiscal resilience, or fiscal responsibility legislation.
(More in today’s Daily Observer)