The proposed increase in the Revenue Recovery Charge (RRC) from 10 to 13 % has been dropped.
Minister of State in the Ministry of Finance Senator Lennox Weston said the Government abandoned the decision after meeting its target without the increase and recognizing the effect it could have on the economy and the working people.
“We are pleased to announce we’re doing it..we have met our target without doing that and we didn’t make a big hoopla about it because you don’t tell your child be happy I’m not beating you, he said.
He continued stating, “the increase in RRC would have caused some additional price increases, it would affect the working capital of some organizations and we have met our target so there is no need for that, so Antiguans can know that the Ministry of Finance and the Government will not be increasing the RRC,” the Junior Finance Minister said.
Prime Minister Gaston Browne in delivering the 2016 Budget Speech, in January, announced that PIT will be scrapped by April, but other measures will be taken to make up for the near $40 million in lost revenue. Twenty million of that was expected to come from the RRC increase while the difference is expected to be made up by other tax reforms.
Meantime, Public Relations Officer of the United Progressive Party Senator Damarni Tabor said that the government should go beyond scrapping the proposed Revenue Recovery Charge. He said they should also do away with the Unincorporated Business Tax.
“We are saying don’t just stop at the RRC but let’s go even further because not everybody got PIT relief only employees got PIT relief but all of the working professionals….accountants, architects and like…they were moved over to the Unincorporated Business Tax or PIT by another name. So what we are saying in light of this windfall, the Unincorporated Business Tax should be removed,” he said.
Senator Tabor, said that the business tax also disincentivize entrepreneurship.
“There’s gonna be less of this same 1/3 of young people being hired so we need to do away with this tax in order to get this economy growing for a change, the PRO noted.