By Robert A. Emmanuel
One of the major policy proposals that the United Progressive Party (UPP) announced in its manifesto was the repeal and replacement of the Unincorporated Business Tax (UBT) and the incremental reduction of the corporate income tax from 25 percent to 15 percent.
During Monday’s press conference to explain the details of the proposal, the party’s Political Leader Harold Lovell said that fiscal policy must have an underlying philosophy behind it, and argued that the proposal will increase the government’s revenue.
“The strategy and philosophy are that we must drive the private sector in Antigua and Barbuda, we must create dynamic local economy, we must encourage people to invest and to protect people who take the decision to invest,” Lovell, a former Finance Minister, said.
“At the moment, the government in Unincorporated Business Tax collects between five to six million dollars and hardly that … we believe that because we will have the flat tax, we will either collect the same amount or more,” he added.
Lovell explained that businesses would be encouraged to self-classify based on annual turnover, but asserted that a verification system will be in place to ensure that large companies do not take advantage of the system to classify themselves as a medium or small business.
“What we will have to do is to verify, as we understand that a large business would be naturally tempted to classify themselves as a small business,” he argued.
Meanwhile, Lovell said the reduction of the corporate income tax would greatly benefit the country through staying competitive on a global market.
“We feel that there is great potential in the region and many small island developing states to develop a tax regime that is attractive, not just for local businesses but for businesses outside.
“If you follow what is happening in the United States, they are moving towards a universal tax rate of 15 percent … but we said, incrementally, we will bring ourselves in line with what would be the global norm,” he said.
“A UPP administration will place great emphasis on creating the pro-business, pro-ease of doing business environment. We believe that it is important for us to spur growth by making it easy for small, medium and other businesses to compete and participate within the business environment,” Lovell stated.