Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review ANTIGUA AND BARBUDA

Current revenue rose by 2.9 per cent ($23.0m) to $815.3 in 2018, an improvement from the performance observed in 2017, however, still fell short of budget expectations by 7.0 per cent. As a percentage of GDP, current revenue fell to 18.3 per cent from 19.4 per cent in 2017. Tax revenue, which accounted for 83.4 per cent of current revenue, experienced the highest intake since 2008. The outturn was influenced by improvements in tax administration, particularly the auditing of more businesses, the hiring of specialized staff and investments in the tax collection IT system. As a result, tax revenue rose by 5.9 per cent ($37.9) to $679.7m in 2018 from $641.8m in 2017. However, as a percentage of GDP, tax revenue declined to 15.2 per cent, from 15.7 per cent in 2017, reflecting a lack of tax buoyancy. There were increases in all the broad tax categories, with the most prominent being receipts from taxes on domestic goods and services. Collections from taxes on domestic goods and services rose by 10.4 per cent to $329.5m, as the major component, the Antigua and Barbuda Sales Tax (ABST), performed the best it has since its introduction in 2007. Receipts from the ABST advanced by 17.5 per cent ($41.4m) to $278.4m from $236.9m in 2017. In contrast, stamp duties fell by $8.8m to $41.2m due to

the granting of waivers. Receipts on taxes on international trade and transactions grew by 0.6 per cent ($1.4m) to $250.6m as a result of higher receipts from import duty ($7.1m) and the revenue recovery charge ($7.4m). Meanwhile, revenue collection of the consumption tax fell by 18.2 per cent ($11.7m) associated with higher global oil prices, which eroded the margins received by the central government. Inflows of revenue from taxes levied on income and profits rose by 5.8 per cent ($4.3) to $78.4 driven by greater inflows of corporate tax, as income tax was repealed on 1 st July 2016. Receipts from property taxes rose to $21.2m from $20.1m in 2017. Non-tax revenue fell by 9.9 per cent to $135.6m, notwithstanding the 10.0 per cent ($5.4m) increase in receipts from the Citizenship by Investment Programme (CIP). The decline in non-tax revenue reflected a contraction in the traditional income streams such as fees and charges on a wide variety of public services. On the capital account, grants amounted to $15.7m, a higher intake than that of 2017, which was reported at $2.1m. However, this was much lower than the budget forecast of $86.6m, which was based on the expectation of a quicker drawn down of the UK-CIF grant for road infrastructure development. On the

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