by Linda Straker
- 2% tax reduction for individuals and corporate bodies
- Country continues to attract investment with a heavy focus on tourism
- US$30 million World Bank makes provision for government to reduce public debt
Individuals and corporate bodies are to benefit from a 2% tax reduction as announced by Finance Minister Dr Keith Mitchell when he presented Grenada’s 2019 Estimates of Revenue and Expenditure which provides for total expenditure including principal repayment on public debt of EC$1,134,013,956.
Presented on Wednesday during the first sitting of the second session of the Tenth Parliament, the focus for the 2019 budget will be on Building Resilience, Advancing Social Development and Transforming the Economy.
He told the Parliament that EC$780.4 million of the total is Recurrent Revenue while EC$637.8 million is Recurrent Expenditure. Capital expenditure is EC$196.4 million. Current Account Surplus is EC$142.7 million; Primary surplus after grants is EC$201.9 million; Overall surplus after grants EC$129. 9 million and Principal repayment/Amortisation is EC$299.8 million.
Indicating that Grenada’s economy will continue to grow in 2019, the Prime Minister said that one of the key factors of the strong economic performance is the targeted public sector investment programme of the government.
“I would be the first to admit that we must do more to improve our implementation rate and therefore the period 2019, a concerted effort would be made to procure services to assist with capacity building in the area of project management in the public service,” he said.
With regards to public sector investment, Dr Mitchell said the economic confidence is evident as the country continues to attract investment both from local and foreigners with a heavy focus on tourism. As of September 2018, of 47 applications for investment, 41 projects were approved with 23 within the tourism sector.
Announcing a 2% reduction on personal income tax and corporate tax for the 2019 tax period, the Prime Minister explained that the reduction would help stimulate the local economy despite the negative effect it will have on government’s revenue.
“Mr Speaker the 2% points reductions will obviously affect government’s revenue collection, but more importantly it will help to stimulate the local economy, put more disposable income in the hands of workers and for companies affording them extra capital to potentially re-invest and grow their respective businesses,” he said.
He also disclosed that relief is on the way for claimants who would have secured judgements against the government for various infractions. “Government is keen to finally settle these claims some of which will be done posthumously,” he said while explaining that the US$30 million loan received on concessionary terms from the World Bank makes provision for government to reduce public debt.
“As such a portion of the funds will be used to compensate claimants, including those whose claims pre-date the New National Party administration,” he said.
Informing the House that the priorities set out in the 2019 budget are intended to give the nation hope and confidence, the Prime Minister in his almost 2-hour presentation called for nationals to be optimistic about the future because the country cannot be built on pessimism.
Making a plea for Grenadians to approach the future with confidence, he said that confidence emanates from the acceptance of our collective ability to overcome difficulties. “The confidence that emanates from the economic growth being experiences after years of shared sacrifices,” he said.
“History would record Grenada is not defined by its borders or the boundaries of its land mass, but rather it is defined by people who have been united by a cause, who share a common value system and who are committed to a common vision for the type of society they wish to live in and one which future generations will inherit,” he said.
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