Grenada Prime Minister Dickon Mitchell, Monday presented Parliament with an EC$1.3 billion (One EC dollar=US$0.37 cents) national budget, announcing a series of relief measures for citizens totaling more than EC$50 million.
He said following the six percent growth this year, the economy is forecast to expand further by 3.6 percent in 2023 underpinned by continued strong recovery in tourism and robust construction activities.
Dickon Mitchell, presenting his first fiscal package, since leading the National Democratic Congress (NDC) to victory in the June 23 general election this year, told legislators that his administration will implement a number of revenue-earning measures.
“As a government, we will do what is necessary as long as it is necessary to shield our citizens from the devastating impact of high prices, especially on food, fuel, and other necessities,” Prime Minister Mitchell said.
Recurrent revenue is estimated at EC$1.05 billion with the government indicating that the priorities for the 2023 fiscal package are based on its strategic transformational policy agenda that is people-centered and lays the foundation for resilience, empowerment, and growth that is set out in its MTAP for the period 2023-2025.
The government said the budget was prepared within a medium-term framework that is in keeping with the requirements of the Fiscal Responsibility Law, in which adherence to the fiscal rules will return in 2023 after three years of Parliament’s-approved suspension.
Dickon Mitchell said the cost-of-living relief measures includes value added tax (VAT) exemption on several food items and other necessities and will cover the period February to December 2023.
These items include soya chunks, veggie patties, olive oil, canola oil, coconut oil, soya bean oil, sunflower oil, red kidney beans, condoms, sanitary pads, hand sanitizers, adult diapers, baby diapers, media storage, black eyes peas, lentil peas, condoms, bathing soap,
“The exemption list is aligned to government’s policy to support healthy eating and lifestyles,” he said.
“We will grant 100 percent concession to both Common External Tariff (CET) and VAT for selective production equipment to support the creative economy for 12 months starting February 01, 2023, these will include storage media and art supplies as well as audio-visual equipment and production equipment for content creators.
“We will further reduce the VAT rate on mobile and broadband data from 20 to 15 percent starting February 1, 2023. This is consistent with government’s policy to build a digital economy. You cannot build a digital economy without Internet and data,” said Prime Minister Mitchell
He said also from February next year, the government will reduce the VAT on electricity consumption from 15 to 7.5 percent for all consumers and will reinstate the policy of zero-rating VAT on electricity consumption up to 99 kilowatts hours for residential consumers.
“To pay for the cost-of-living relief measures and transforming priorities we will implement the following, effective February 1 …interest the excise tax on alcohol from EC$1.10 and EC$4.40 per liter to EC$1.50 and EC$5.50 per liter and the excise tax on cigarettes from 100 percent to 200 percent.”
Other new revenue-earning measures will include reintroducing effective January 18, next year, the petrol tax at a rate of EC$3.50 per gallon instead of EC$5.50 per gallon on duty-paid sales; Increasing VAT on carbonated beverages and other drinks with high sugar content from 15 to 20 percent; reinstating the environmental levy of five EC dollars and EC$10 and as of February apply an environmental levy on water usage. Consumers using between 2800 and 5500 gallons will be paying five EC dollars for over 5500 it will be EC$10.
Prime Minister Mitchell said that the budget is fully financed and government operations before financing are forecast to result in an overall surplus of EC$$62.7 million.
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