PM hints at scrapping income tax

ROSEAU (CMC):

Prime Minister Roosevelt Skerrit has raised the possibility of abolishing personal income tax in Dominica by 2028, saying he has long opposed the measure on philosophical grounds.

Addressing a town hall meeting hosted by the ruling Dominica Labour Party (DLP) ahead of the September 7 by-election in the Roseau North constituency, Skerrit said that, when the party first took office in 2000, income tax rates stood at 20 per cent, 35 per cent and 40 per cent.

“We reduced it to 15, to 25, and to 45. And we increased the tax threshold from EC$12,000 (US$0.37 cents) a year to EC$30,000 a year,” Skerrit said, telling supporters that “that was the first time that we saw any real change where income tax in Dominica is concerned”.

He said his administration later introduced further tax reductions after returning to office, despite both the opposition United Workers Party (UWP) and the Dominica Freedom Party (DFP) having held office in the interim.

“... they never touched it and then we decided this year to allow working people and taxpaying people to keep more money than they’re earning, because, for me personally, I’m not an income tax person, I do not like income tax.

“From a philosophical standpoint, I believe that people should be allowed to keep their property that they worked for ... I believe more in consumption taxes, that you pay based on what you consume is more equitable.

“And so I am not ruling out that, if we’re able to implement the measures in the budget, and see an increase in revenues to the country, that, by 2028 ,we remove income tax altogether and allow them to keep more of what they have,” Skerrit said.

He added that the administration hopes any additional income retained by taxpayers would be spent in the wider economy, particularly as tourist arrivals continue to grow.

Earlier this month, Finance Minister Dr Irving McIntyre, while presenting the EC$1.15 billion national budget to Parliament, said the government had consistently reduced the income tax burden on working Dominicans.

He said that, following the country’s economic recovery and the successful completion of its International Monetary Fund (IMF)-supported programme, the government began providing significant tax relief from 2009.

“We reduced the tax rates to 15 per cent, 25 per cent and 35 per cent. We also increased the tax-free threshold first to EC$25,000 and then to EC$30,000. We increased mortgage deductions from EC$15,000 on one property to EC$30,000 and EC$15,000 on a first and second property, respectively. We allowed deductions for student loans, home and medical insurance.”

According to McIntyre, the measures reduced the income tax burden on workers and removed thousands of Dominicans from the tax net, allowing households to retain a larger share of their earnings.

“Today, despite a global environment marked by economic uncertainty, this government will again provide relief to further empower the hardworking people of Dominica. It is therefore my pleasure to propose that, effective January 1, 2027, the government will replace the income tax rates of 15 per cent, 25 per cent and 35 per cent with a single, flat rate of 10 per cent,” he said.