ST JOHN'S, Antigua (AP) -- The Antiguan parliament passed a tax law that paves the way for residents to pay personal income taxes for the first time in nearly 30 years.
The United Progressive Party government said it was forced to reintroduce the tax to deal with the deficit left by the former Antigua Labour Party administration, which abolished income tax in 1976.
The bill, passed late Thursday, goes next to the Senate, which is expected to approve it.
The tax would come into effect on April 15, with proposed rates ranging from 10 to 25 percent on incomes about a minimum level.
Since 1976, the salaries of Antiguans and Barbudans have gone untaxed, except for medical, social security and education dues.
The opposition argues that the reintroduction of income tax will further hurt the weak economy and create unnecessary hardship for the workers.
But the one year-old government of Prime Minister Baldwin Spencer government said because of an EC$300billion (US$111 billion) debt and a large public sector wage bill, it had to find a source of revenue to fund development projects and other social needs.
"We inherited an economy that was in worse situation than we imagined and all we are asking the people to do is to make a sacrifice while we try to turn things around," Spencer said.
Antigua's economy, based on tourism and offshore banking, has declined in recent years. While Antigua attracts upscale tourists, especially yachters, critics says few benefits reach ordinary people.
Source: Yahoo Finance
