Prime Minister Dr. Ralph Gonsalves has allayed the fears of Vincentians who may have been worrying that he might increase taxes in next week’s 2006 Budget. On Tuesday, in the Budget Estimates – a precursor to the Budget – he announced the Government will not be increasing taxes. “We are not increasing the taxes, we are not increasing the rates but we are increasing the efficiency in collecting taxes,” said Dr. Gonsalves to the nation. {{more}}

The Prime Minister who also holds the portfolio of Minister of Finance disclosed that the 2006 Estimates amounts to $580, 983, 263.This figure is $6,112, 063 or 1.0 per cent lower than the 2005 approved budget.

Dr. Gonsalves explained that this modest decline in the 2006 Budget results from a 20 per cent reduction in the Capital Expenditure Budget.

This year’s budget is financed by a Current Revenue of $363,720, 450 and Capital Receipts of $217, 262, 813.

Revenue from tax sources is expected to account for 88 per cent or $321, 588, 000 of the Government’s inflows in 2006, said Dr. Gonsalves.

Dr. Gonsalves said it is important to note that the 2006 Budget has a surplus on the Current Account of $2,709,905.

He announced that five new positions aimed at strengthening the Intelligence and Operations Units at the Customs and Excise Department have been created and six at the Inland Revenue Department to beef up the collection of revenue.

The Estimates for 2006 comprise recurrent outlays of $415,520,943 and capital expenditure of $165,462,320. He said the recurrent expenditure has an increase of $36,270,814 or 10 per cent over the approved recurrent expenditure estimates for 2005.

In his response, Opposition Leader, Arnhim Eustace, lamented that he is not sure the Budget Estimates are taken as seriously as they should be because more attention is given to the Budget Debate which comes shortly after. He said the fact remains that the Budget Estimates are very important debates in the life of any Parliament of any country.

He recalled that at the opening of the debate on the 2005 Budget Estimates, he indicated then that the financial summary for the years 2005-2007 paints a very unusual picture for St. Vincent and the Grenadines finances. He added then that it was the first time in over 20 years a financial summary was being presented in a way that shows a deficit on the Current Account.

“I can repeat the same statements for the year 2006, at the estimates for 2006,” said Eustace.

Prime Minister Gonsalves in his closing remarks said he was very grateful for the comments made by the Leader of the Opposition. He said Eustace has repeated over and over that there are hard choices to be made but he has not said to Parliament, which are the choices that he would make.

In St.Vincent and the Grenadines it is customary that the Budget is presented in December but owing to the General Elections on December 7, 2005, the 2006 Budget was postponed to Monday, January 23, 2006.