Looming increase in ABST greeted with accusations of Gov’t incompetence, giveaways to the rich, and hardship for the poor

Residents are upset and worried to learn that the Gaston Browne
Administration is contemplating a hike in the rate of the Antigua and
Barbuda Sales Tax (ABST).

According to an online news report, a 2 percent increase in the sales
tax is being contemplated – reportedly to allow the Government to

deal with increased financial obligations, among them pay increases
to public servants.

At present, the ABST rate is 15 percent, and this is already proving
challenging for many residents, as inflation has driven up the cost of
living in most sectors.
However, Prime Minister Gaston Browne – who is also minister of
finance – is broadly hinting that an increase is necessary to meet the
current economic demands.
Members of the public are expressing their displeasure and
reminding Browne that he has already declared Antigua and
Barbuda an “economic powerhouse” and boasted about its high GDP
and enviable rate of growth.
One resident says he might be forced to import multiple barrels of
goods during the Ten Dollar Barrel Initiative if it still exists next year.
He adds that the Administration is trying to pauperize him while,
already, he is living hand to mouth and scarcely that.
Another critic says the Labour Party Government is looking at a
most retrogressive tax system.
The person notes that, having removed direct income tax, the
Browne Administration is now forced to increase the ABST –
through which lower-income earners pay a higher proportion of
their salaries in taxes compared to higher-income earners.
The writer says that an income tax is fairer, since the rich would pay
more and the poor would pay less, if anything at all. However, with
a sales tax, everyone pays; and those making less money are the
ones who feel it most in their pockets.

The Government has promised public servants a 14 percent salary
increase during the next budget cycle, which, it claims, amounts to
approximately $40 million.

However, the Public Service Association has been at pains to explain
that the increases due actually amount to 9% – since 5% had been
paid in 2018.
Apparently, the increase in the ABST is intended to meet this
commitment, among others, including servicing loans for the
expansion of The UWI – Five Islands; funding road and
infrastructure enhancements; and additional borrowings to cover
operational expenses.

Another resident says the public should not be fooled, since the
Administration is in a financial crisis. This is evidenced by the
Government’s inability to pay suppliers, pensions and gratuities, and
to maintain its buildings and medical facilities.
The critic recalls Browne’s complaint that the current tax income
falls below that of other OECS countries. However, the disgruntled
writer says, the Administration’s fiscal incompetence will continue
to result in giveaways and concessions for the rich and higher taxes
imposed on the backs of the poor.
In the wake of its serious expenditure ahead of the recent by-
election in St. Mary’s South, others say the Labour Government
should consider curbing all the “stupid spending and blatant
corruption” and put the brakes on tax concessions for the wealthy.
Additionally, persons recommend that tax compliance be tackled in
order to close the revenue-collection gap, instead of burdening the
poor with a sales-tax increase that would drive the already high cost
of living through the roof.