One percent Customs Service Charge only new tax
EXCEPT FOR A ONE PER CENT increase to the Customs Service Charge, no new taxes are included in the 2021 Budget of St Vincent and the Grenadines.
Finance Minister Camillo Gonsalves delivered the Budget Address in Parliament yesterday, Monday February 1, where he painted a picture of the fiscal year ahead, particularly in the face of the coronavirus pandemic and the ongoing seismic activity at La Soufriere volcano.
This is the third consecutive year that SVG’s budget has been over the billion-dollar mark. This year, it is estimated at EC$1.21 billion – an increase of over 2 per cent on the figure approved in 2020 and a 9.7 per cent decline when compared with the revised 2020 Budget.
In his address yesterday, Gonsalves noted that a number of regional organisations play an indispensable role in the governance, safety and resilience of this country, particularly when the current challenges are taken into consideration.
He said the multi-island state’s response to the coronavirus pandemic, to date, would have been impossible without the support and technical experience of the Caribbean Public Health Agency (CARPHA), the Pan-American Health Organization (PAHO) and the Regional Security Service (RSS).
“Similarly, our monitoring, analysis and preparation for the any eventualities at the La Soufriere volcano were made effective through our cooperation with the Caribbean Disaster Emergency Management Agency (CDEMA), the CARICOM Implementing Agency for Crime and Security (IMPACS), the Caribbean Institute of Meteorology and Hydrology, Caribbean Meteorological Services, and the very important Seismic Research Centre,” the finance minister said.
Gonsalves also acknowledged the importance of the Eastern Caribbean Civil Aviation Authority and the OECS.
He added that these agencies constitute an extension of the government’s local functions and are inextricable from the work of the state.
“They are also collective entities, upon which multiple nations in our region depend. Unfortunately, the functioning of these essential agencies is significantly stymied from time to time by irregular and insufficient funding. Our government, and those of our neighbors, have been guilty at one time or another, of racking up arrears to these entities,” the finance minister said.
He added that “their own emergency services to us at this particular time were hampered by various financial challenges. It is an unsustainable state of affairs. In order to assure consistent, reliable funding of these organizations, the Government will undertake to pass legislation that will guarantee automaticity of financing to certain critical regional entities”.
This year’s Budget makes provisions for the Customs Service Charge to increase from five to six per cent, to fund these entities – a rate that the finance minister says is still among the lowest in the region.
The one per cent increase is expected to generate EC$9.6 million this year and the funds will be ring fenced to be used specifically for that purpose only.
“While we have been cautious not to impose tax measures at this time, and indeed, postponed many of the fees and measures passed in last year’s budget, it is precisely the nature of the times and our challenges that demand our decisive response today. We simply cannot manage the pandemic and the volcano without properly funded institutions,” Gonsalves said.
The Budget Debate continues today, with Opposition Leader, Dr Godwin Friday delivering his response to the 2021 Budget presentation at 9 am.