Minister of Finance Camillo Gonsalves has announced the implementation of a number of the fiscal policies Parliament approved in 2020 but were shelved because of the novel coronavirus (COVD-19) pandemic and the April 2021 explosive eruption of La Soufriere volcano.
“The fiscal measures for budget 2023 will focus on the reduction of income taxes for both individuals and corporations, increases in user fees for some services to maintain some level of parity with the cost of delivering the services and the airport service charge,” he said as he delivered the EC$1.44 billion fiscal package for 2023 on Monday evening.
Therefore, the government will this year return the airport departure tax to EC$100, up from the EC$50 reduction during the height of the pandemic, implement the increase of the overstay fee as well as Maritime Administration, agricultural services and Fisheries Division fees.
The finance minister noted that the government has reduced taxes from 30% to 20% and increased the threshold from EC$20,000 to EC$22,000, annually.
Gonsalves reminded lawmakers that in June 2020, in the midst of the COVID-19 pandemic, the airport service charge was reduced by 50% from EC$100 to EC$50.
He said that the measure, which was authorised by Statutory Rules & Order No. 22 of 2022 was undertaken as a symbolic means to encourage regional travel with the collapse of LIAT.
“Travel within the region is proving to be quite challenging. The existing airlift capacity on various inter island routes is deficient, leading to great inconvenience to the traveling public. Additionally, as travel restrictions internationally and regionally have been rolled back and persons are traveling more freely — although I see the United States has reimposed the vaccine requirement to enter the US — we believe that it is propitious to return the airport service charge to EC$100.”
Gonsalves said that effective May 1, 2023, the airport service charge will revert to $100 or US$40.
“An additional $4 million in revenue is expected from this measure. These funds will flow directly to the Argyle International Airport to bolster the operating bottom line of the company,” he told lawmakers.
He said the overstayers fee under the Immigration Restriction Act is currently EC$25.
In Budget 2020, this fee was increased to EC$100 but was not implemented along with the extension of stay fees, which was increased to EC$100.
“As a result, most persons who wish to stay longer in the country, simply pay the lower overstay fee than they do to apply for an extension of stay because one is $25 and one is $100,” Gonsalves said.
“To address this act of arbitrage, the overstayer’s fee will be increased to $100 with effect from Feb.1, 2023,” he told Parliament.
“This measure is expected to yield $100,000 in additional revenue.”
He said the revenue measures for which implementation was deferred in the 2020 budget were Maritime Administration fees, hospitals fees, radiological fees, laboratory fees, dental fees, fees for agricultural services and Fisheries Division fees.
“From that list of differed measures, the following will be implemented in budget 2023 with effect from Feb. 1: the Maritime Administration fees, the fees for agricultural services and the Fisheries Division fees…
“The health-related fees will be further deferred, pending the completion of the comprehensive review of user fees being undertaken as a part of the Health Sector Resilience Project. And as such, when honourable members receive their copies of the speech they will see the maritime, agricultural and fisheries division fees which essentially just pay for the cost of the service that is being provided in those respects.”