Brades, Montserrat: Premier, Reuben Meade, Friday presented an EC$126 million (US$46.6 million) budget to the Legislative Assembly warning tax dodgers that his administration will be tough on them as the British Overseas Territory seeks a “sustainable future”, according to a CMC report.
Meade told legislators that the EC$101 million (US$37.4 million) would be used for the normal operations of the public service. He said his administration has already received approval for EC$52.1 million (US$19.2 million) for projects that would include port and town development, geothermal, tourism and development of the local business environment and that the Government is expecting local revenue estimated at EC$45 million (US$16.6 million), the CMC report stated.
He added, “we expect that as the tax simplification measures are implemented that it will build greater confidence within the business community.
“We are also currently revising a number of fees and where necessary eliminate any of those fees that may be considered nuisance charges. We had promised to modify the income tax structure and most persons have already seen a slight reduction in their income tax bill equivalent to a salary increase of approximately $1,200 (US$444) per annum.”
The CMC said that he told legislators that the Government provided opportunities for tax payers to negotiate the resolution of their tax arrears, adding “for those who did not come forward a lawyer has now been placed in the tax department to ensure that those persons who deliberately refuse to make adequate provision to clear their indebtedness are taken before the courts.
“We must all contribute to the local costs of running the island,” Meade said, adding that over the next three years budgetary grants are expected to remain fixed at EC$55.8 million (US$20.6 million) annually.
“As planned economic activity increases we expect that local revenues will improve which will enable us to have greater capacity to fund our local budget and reduce our requirement for budgetary aid,” he said, noting that the island’s total external debt stands at EC$7.7 million (US$2.85 million).
Meade said that there is increasing pressure on the island’s financial resources arising from a number of outstanding litigations and substantial arrears from prior years.
“We will have to settle and manage these during the year. As a result, tighter scrutiny on the management of public funds will be necessary, whereby Accounting Officers will be required to submit quarterly reports to Cabinet on the performance of their programmes and allocations. In turn we will provide quarterly updates to the Legislative Assembly on the performance of the various Ministries,” he said.
The CMC report said he told the parliamentarians that his administration has now put in place the medium term expenditure framework and that this year’s budget will be considered the base year.
“Any changes going forward will be as a result of policy decisions agreed by Cabinet, including adjustments for inflation and statutory requirements. Therefore, the amounts for the two forward years 2013/14 and 2014/15 are similar to the base year,” he added.
He said the budget was being presented “in a challenging but hopeful time” and that his administration is committed to an economic programme that will require major changes “in the way we do business and one that will auger well for the long term benefit of all of our people”.
He said an overview of the budget would indicate a commitment to a private sector led economy, a strong Governance framework, appropriate and relevant infrastructure development, and a vibrant economy based on “a GOD fearing society where we will stamp out crime and violence to maintain a society free from poverty and crime”.
The CMC stated that Meade said that the economic environment in which Montserrat finds itself “is volatile but not hopeless.
“It is for this reason that we cannot abandon the pillars on which we intend to build this economy. Through appropriate policies, strong and mature leadership, access to targeted finances we can find a niche on which to build sustainable growth and development thus ensuring we can support the less fortunate in our society.
“We must make the best use of the opportunities that will assist us to shape a sustainable future for Montserrat,” he said, adding that the government has a long term vision of developing a sustainable and diversified economy which generates employment opportunities for citizens.
But he said in order to deliver this vision “we must develop of a private sector that will be the engine for growth and a public sector that facilitates this.
“Our ultimate goal is to have private sector activities that contribute at least 50 per cent of gross domestic product (GDP) by 2020.
But he warned this transformation will not happen overnight, and will require reforms in many areas, according to the CMC report.
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