Budget brings good news for businesses, workers
Workers and businesses in St Vincent and the Grenadines have been relieved of some of their tax burden.
Yesterday, during the 2018 Budget Address, Minister of Finance Camillo Gonsalves announced measures that will see Vincentian citizens and businesses keeping more of the money they earn.
The address, which had as its theme âContinuity and Change: Job Creation, Resilience, Sustainable Development and New Opportunities in a Rapidly-Changing Global Environment,â was the Ministerâs first Budget Address since he was appointed on November 10, 2017.
Gonsalves said the standard rate of company taxes will be reduced from 32.5 per cent to 30 per cent, while similarly, the marginal rate of personal income tax will go down from 32.5 to 30 per cent.
âThird, the income tax rate for hotels, previously 30 per cent, is hereby reduced to 29 per cent. This reduction, and the special rate for hoteliers, is a tangible indication of this Governmentâs continued prioritization of local hotel growth and development. Fourth, we shall raise the standard deduction for personal income tax from $18,000 to $20,000. This means that the first $20,000 earned by Vincentians will not attract any income tax,â the Minister announced.
He said the measures continue the commitment of the Government to provide economic stimuli via tax reductions and to improve, in practical and tangible ways, the condition of the Vincentian worker.
The lowering of the tax rate and raising of the threshold will cost the Government approximately $12 million, Gonsalves said.
The Minister said 2009, the first year of the full-blown global economic crisis, was the last occasion on which tax relief was provided for the workers and the private sector, in respect of profits and personal income.
He said following an internal analysis, it was concluded that it is now time to provide additional tax relief.
The reduction in the top marginal rate for Personal Income Tax from 32.5 per cent to 30 per cent will result in a revenue loss of $4.2 million; the increase in the standard deduction from $18,000 to $20,000 will result in a revenue loss of $2.7 million; and the reduction in the rate of tax paid on corporate income from 32.5 per cent to 30 per cent, and the additional relief on hotelsâ operations, will result in a revenue loss of $5.1 million.
The Minister, however, said the Government does not simply intend to forego the $12 million in revenue loss, but will pursue tax delinquents with ârenewed focus and vigour.â