Tax breaks must end, says economist

Economist and policy consultant, Avernash Persaud is urging government to remove concessions for foreign investors, a similar advice proffered by the International Monetary Fund (IMF).

Persaud said government should instead focus its attention on infrastructure development.

Persaud, who has assisted in policy development in countries like Singapore, said investors will be more willing to spend where they can see a return on investment.

“If we want long term direct foreign investment, it must be because those investors believe that they can get a reasonable rate of return investing in Antigua. If they feel that rate of return is conditional on their not having to pay tax, that is not a long term route to economic development,” the economist said.

“We need to use this money to develop great public services, and if we develop great public services then people are prepared to pay the tax,” he said. “Part of the problem we have in the Caribbean, and in Antigua, is that people are paying taxes and they’re not very confident or comfortable with what they’re getting for paying that.”

Persaud further suggested that government stop awarding new tax concessions and take steps to “unwind” the old ones.

“It may be an argument that you put on these concessions to get to a critical mass, but these concessions should be time limited,” he said. “They should automatically stop after five years or 10 years and have to be renewed through Parliament.”