3-Year Structural Adjustment from 2014

PM Mitchell will announce the new income tax threshold

Prime Minister Dr Keith Mitchell has disclosed that Grenada will be implementing a three year home grown structural adjustment programme within the first quarter of 2014.

Though the full programme is yet to be developed, he indicated that it will involve measures that will affect the population in various ways and thus he anticipate that there will be fall outs from sections of the society.

“I do expect a fall out from the decisions to be taken,” Dr Mitchell told the media in a news conference on Monday. “I do not enjoying doing this at all. I wish I did not have to this. I don’t expect people to love me for doing this,” he said. “We are forced in a corner where we have to do something,” he added.

Measures to be taken will include:

  • Reducing the income tax threshold to between EC$30,000-$36,000 to rates that will be between 10% to 15%
  • Increase the income tax rate for those who earn more than EC$60,000
  • Improve compliance of fees at government department where fees are collected
  • Cut back on wastage in all in forms such as in rental of buildings to house government offices
  • Reduce advisors to government and work out an arrangement with trade unions as it pertains to salaries for public officers
  • Reduce the number of public stand pipes

With regards to salary reduction like was done in Barbados, the Prime Minister said that this will not be an option for Grenada. “I will not be able to cut anybody’s salary,” he said.

Describing the trip to Washington as very successful, he said that creditors appears to have appreciate the need for debt relief and they are willing to help the country get out of the current situation with regard to its debt burden.

“The country must in return show that it is helping itself… when we are expecting people to help us, we must show that we are helping ourselves,” he said.

The complete structural adjustment programme will be a fundamental component for the 2014 budget which is expected to be presented in the early days of December 2013. By that time Grenada would have signed the agreement with the IMF.

by Linda Straker

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