No new taxes – but more robust collection: Budget to be unveiled December 5

0
367
cluster5
Prime Minister Gaston Browne presents the March 2023 budget (File photo)
- Advertisement -

By Elesha George

[email protected]

Prime Minister Gaston Browne will unveil the 2024 budget on December 5 and present to the people how his administration intends to spend and earn revenue for the next fiscal year.

The December budget is unusual because it is the second time this year that the government will present a fiscal plan as there was a budget presented in March 2023.

Budget presentations are usually given between January and March. Nevertheless, residents will be waiting eagerly to know what big decisions will guide the government spending and what ministries and public services will receive the biggest chunk of change.

One of the most significant components of government expenditure is directed towards wages, salaries and personal emoluments, totalling approximately $38.6 million per month. Notably, the budgetary notes indicate that any wage increases are unlikely to be significant for 2024.

The statement cites the “need to ensure wage adjustments are kept in line with the rate of inflation since exceeding this rate can imperil government’s ability to meet its monthly obligations”.

In 2023, the government’s budget stood at $1.8 billion, with $1.04 billion allocated for recurrent expenditures such as wages, salaries, and statutory contributions. Public servants and other workers received an allocation of approximately $425.9 million in the current fiscal year, compared to $410.6 million in 2022.

Will spending increase?

While certain budgetary figures such as wages and salaries remain relatively constant, there are substantial debts accrued from ongoing projects that are likely to escalate government spending in 2024.

For example, the 2024 budget is likely to include an increase for the Ministry of Education which is looking to spend millions of dollars retrofitting classrooms and public spaces with air conditioning units in an attempt to keep temperatures down during school hours. This effort includes purchasing the necessary units and rewiring aged school facilities. In 2023, the Ministry of Education, Sport and Creative Industries was given the lion’s share of ministry allocations at $185 million.

The Ministry of Works, given the deplorable state of the country’s roadways, is another priority for residents. In the current budget, $161.2 million was designated for capital projects, specifically road repair and maintenance, in addition to $97.6 million allocated to the Ministry of Housing, Works, Lands, and Urban Renewal. Whether these areas will see an increase in 2024 remains to be seen.

“Water, water, water”, a few residents said. It is no surprise that water and access to potable water made the list of areas where finances should be invested since a three-year drought largely left the country with little to no surface water, forcing the Antigua Public Utilities Authority (APUA) to introduce water rationing schedules.

Of course, healthcare cannot be left out. Nurses and other healthcare professionals under the government’s employ are always seeking optimal working conditions. The country’s main hospital – the Sir Lester Bird Medical Centre – is also in need of repair and maintenance.

Additionally, the government may allocate some funds to purchase the Cancer Centre Eastern Caribbean Limited, which would require both personnel and additional equipment.

What about taxes?

On Wednesday, the government met with a team of technical staff from the Ministry of Finance, led by the Financial Secretary, to examine its current fiscal situation and to prepare for December’s budget presentation.

It was revealed then that the government is only collecting about 16 percent of its revenues from taxes. However, the Cabinet statement cites the Caribbean Development Bank (CDB) recommendation of a tax-to-GDP ratio of 25 percent, implying that an increase is necessary to provide adequate resources for funding public services, infrastructure, and social programmes.

“There is therefore a need to bring the ratio to about 20 percent. It is to be emphasised that this will be achieved through a number of methods, inclusive of greater fiscal discipline through the reduction of discretionary tax waivers, more robust collection of taxes, and stricter control of government spending. Also, there is a need to ensure social programmes are targeted to those most in need,” the statement continued.

In anticipation of the upcoming budget, the government clarified that it will not introduce new taxes, including personal income tax. Instead, the focus will be on more efficient tax collection. “All efforts are to be placed into more robust collection of existing taxes,” the statement read. 

However, the statement did not state whether there was the intention to raise any existing taxes.

- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

ten − six =