ST. GEORGE’S, Grenada, Thursday October 31, 2013, CMC – The Grenada government has announced new tax measures it said would help provide much needed revenue and urged the private sector not to use the measure to lay off workers.
Prime Minister Dr. Keith Mitchell in a nationwide radio and television broadcast on Wednesday night said that his administration had agreed that persons earning up to EC$36,000 annually or EC$3,000 per month pays zero tax.
Persons earning EC$36,000 to EC$60,000 annually pays 15% tax on the portion above EC$36,000 and persons earning above EC$60,000 annually will continue to pay 30% on the portion above EC$60,000 in addition to the 15% on the portion between EC$36,000 and EC$60,000.
He said the implementation of new tax measures are necessary as his government puts structures in place to increase revenue.
The Prime Minister called on banks to be sensitive as the government knows that lowering of the income tax threshold will affect some persons who have obligations with financial institutions.
“The banks have assured government that it will work with its customers where necessary. I hereby make a similar appeal to our credit unions,” he said while voicing concern about the possibility of job layoffs.
“I hereby make a special appeal to all employers, especially in the private sector, to exercise restraint in this very difficult period. Retrenchment must be a last resort. We ask that you make a special effort to avoid further layoffs at this time,” he said as he called on trade unions to exercise restraint in respect of wage demands in government and in the private sector.
Mitchell, who also announced that adjustments will be made to property taxes, issued a warning to delinquent taxpayers.
“No country can run without taxes. No government can provide services without taxes. Throughout our consultations over the past few weeks, there have been consistent calls for government to ensure that everyone pays their fair share.
As a consequence, there will be new policies to deal with persons who are not paying their fair share of taxes. Already, Inland Revenue has identified the top 100 tax delinquents and they are being pursued for their taxes owed to the state. This is not simply a fiscal issue. It is a moral issue,” he said.
The Prime Minister, who is also Minister of Finance, told the nation that the Inland Revenue Division will be strengthened through a combination of advisers from friendly countries, new policies and outsourcing.
He said during the coming weeks there will be further consultations as the government seeks to build consensus, and broaden support for the homegrown programme.
The “Letter of Intent” for the programme facilitated by the IMF, will then be signed at the end of November.
“There will be some pain for all, but there will also be many benefits for all,” he warned while explaining that government’s proactive approach to designing a home-grown programme is being done with the help of several agencies including the IMF, the World Bank, the Caribbean Development Bank, the Eastern Caribbean Central Bank and the European Union.
Concerning public debt the government is proceeding with the debt restructuring which will result in significant debt relief for Grenada.
“This relief will allow government to invest more in our people and invest more in the productive sectors; thereby boosting economic growth and job creation,” Mitchell said.
The Ministry of Finance will provide technical support especially in tax administration, planning and macro-economic advice.
“This is a time of shared sacrifice. However, as Grenada’s economy gets stronger, there will be a time of shared benefits from the fruits of the recovery,” he promised. Click here to receive free news bulletins via email from Caribbean360. (View sample)