By Samantha Simon
[email protected]
The International Monetary Fund (IMF) has advised the government of Antigua and Barbuda to consider increasing its tax revenue.
During a news conference at an IMF-sponsored training program on economic and financial reporting, IMF Managing Director Kristalina Georgieva, noted that Antigua and Barbuda’s 16% tax-to-GDP ratio places it barely above the minimum level required for a country to function properly.
Georgieva stated that with such a low tax intake ratio, it is crucial for Antigua and Barbuda to ensure that there are no tax loopholes and that tax collection is implemented efficiently and predictably, taking advantage of digital tracking systems.
The IMF head recommended that the country evaluate whether the current tax revenues are sufficient or if increases are needed.
If the latter, Georgieva suggested exploring different tax sources such as taxes on profits, income, property, and inheritance to determine the most appropriate approach for the small island economy.
A third consideration raised by the IMF chief is whether there are opportunities to accelerate economic growth in Antigua and Barbuda, which could in turn boost tax revenues.
The economy reportedly grew by 5.9% in 2023 and is projected to expand by 6.1% in 2024 before moderating to 4% growth in 2025.
Georgieva proposed that Antigua and Barbuda could look at broadening its sales tax base, introducing taxes on products like alcohol and tobacco, or strengthening its customs system to enhance tax collection.
With its current 16% tax-to-GDP ratio just barely meeting the minimum threshold, the IMF emphasised that it is important for Antigua and Barbuda to ensure it is collecting every penny of taxes due, while examining ways to increase its overall tax intake.