St.Kitts – Nevis May Re-Introduce Personal Income Tax

Deputy PAM Leader - Eugene Hamilton

Deputy PAM Leader – Eugene Hamilton

Basseterre, St.Kitts – Nevis
People’s Action Movement
January 22, 2011

Employees of the Ministry of Finance are reporting  that official instructions have been issued with regard to studying the introduction of personal income tax in the Federation of St. Kitts and Nevis. There is even a proposed date of March 2011 as the possible time to when this new tax could be operationalized. People’s Action Movement Deputy Political Leader the Hon. Eugene Hamilton expressed alarm at the possibility of the government introducing a Personal Income Tax.

“This is an extremely alarming development. Introducing a personal income tax at this time in the federation would be even more regressive than the punitive Value Added Tax,” lamented Hamilton.

“It is a tragic commentary on the financial disaster now facing the federation that this Labour government is even considering such a giant step backwards. I hope and pray for the sake of our people who have already been burdened with the highest VAT tax in the region and an increase in the Social Services levy and Electricity rate, that this consideration of an Income Tax will remain just a consideration and not implemented. Implementing a personal income tax under the current circumstances in St. Kitts and Nevis would be a simple transfer of the ever shrinking amount of public money from one bucket with a big hole into a bigger bucket with an even bigger hole. I am totally against any possible re-introduction of Personal Income Tax as to put it in the words of our great maestro King Ellie Matt “The Poor Can’t Take No More” Hamilton continued.

The 2009 IMF Article IV Consultation warned  the Minister of Finance Prime Minister Dr. Denzil Douglas and the  Labour administration that if it insisted on following the path outlined in the 2009 National Budget the National Debt would balloon to over 200% of GDP by 2014 but if the government implemented certain fiscal measures including reducing tax concessions among others in 2009 the debt would shrink to 140% of GDP by 2014.

In 1980 almost immediately upon taking office the visionary Rt. Hon Dr. Sir Kennedy Simmonds led People’s Action Movement Administration abolished personal income tax in St. Kitts and Nevis Implementing an election platform promise which was heavily criticised by the Labour Party the  then opposition of the day. The abolition of Personal Income Tax resulted in unprecedented economic growth in the federation.In fact the federations growth was the best in the Caribbean and Latin America. The middle class exploded and the number of poor people shrank.

“An entire generation has been born in St. Kitts and Nevis since the former People’s Action Movement Administration abolished this burdensome tax in 1980. A very significant portion of the current workforce has never paid a personal income tax. If this tax is re-introduced it will essentially send the country back 30 years. This would be a huge step backwards for the country. I would encourage the government to resist the urge to implement a Personal Income Tax as it will result in economic suicide for our country and undue burdens for our people,” Hamilton implored.

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