Several new fiscal measures have been announced by Finance Minister Camillo Gonsalves during his 2023 budget address yesterday (January 9).
Among the fiscal measures include decreases in personal and corporate income taxes and increases in some user fees.
Both Personal Income Tax and Corporate Income Tax will be reduced from 30 percent to 28 percent. The income tax threshold has also been adjusted from $20,000 to $22,000.
As of May 1, 2023, the Airport Service Charge will return to EC $100, while from February 1, 2023, the Overstayers Fee will be increased from EC $25 to EC $100 (1 EC/XCD = $0.37 USD).
Additionally, increases that the government had planned to implement in the 2020 budget – referred to as – deferred measures, will come into effect on February 1, 2023 as a result of the 2023 budget.
These include the maritime administration fees, the fees for agricultural services, and the Fisheries Division fees.
Increase in Airport Service Charge
In explaining the increase in the Airport Service Charge, Finance Minister Camillo Gonsalves said: “On the 12th of June 2022 in the midst of the COVID-19 pandemic, the Airport Service Charge was reduced by 50 percent – from EC$100 to EC $50. This measure which was authorized by Statutory Rule and Order No. 22 of 2022 was undertaken as a symbolic means to encourage regional travel.”
He said: “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 $100,” the finance minister added.
He said: “To this end, with effect from May 1, 2023, the Airport Service Charge will revert to EC$100 or $40 USD. An additional four million dollars 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.”
The overstayers fee increase
Minister Gonsalves said the Overstayers Fee under the Immigration Restriction Act is currently $25 if an individual overstays his/her time in St. Vincent and the Grenadines.
“In budget 2020, this fee was increased to $100 but was not implemented along with the Extension of Stay Fees which was increased to $100,” he said.
He said: “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. To address this act of arbitrage, the Overstayers Fee will be increased to $100 with effect from the first of February, 2023.”
“This measure is expected to yield EC$100,000 dollars in additional revenue,” he added.
The deferred measures
He also addressed revenue measures for which implementation was deferred in the 2020 budget.
They include maritime administration fees, hospital fees, radiological fees, laboratory fees, dental fees, fees for agricultural services, and Fisheries Division Fees.
From the list of deferred measures, the maritime administration fees, the fees for agricultural services, and the Fisheries Division fees will be implemented in budget 2023 with effect from February 1, Mr. Gonsalves said.
He said those fees essentially just pay for the cost of the services being provided.
He said the health-related fees will be further deferred pending the completion of the comprehensive review of user fees that is being undertaken as a part of the Health Sector Resilience Project.
By Demion Mc Tair