St George’s, Grenada — Grenada’s Prime Minister Dr Keith Mitchell will announce a reduction in the tax threshold at which personal income tax becomes payable when he delivers an address to the nation on Wednesday night.
Currently, residents with annual earnings of EC$60,000 (US$22,222) have to pay income tax at 30 percent on the excess. The new starting threshold is expected to be reduced to half that amount.
Mitchell’s address follows recent meetings in Washington with International Monetary Fund (IMF) and World Bank officials.
He is also expected to report on the status of the so-called home grown structural adjustment programme in development with the IMF and soft loans and grants the country is expected to receive from international agencies, as well as technical and other financial support.
In addition, Mitchell will tell the nation how the government is tackling the issue of tax delinquents and outline plans to collect outstanding revenue.
He will also update the country on waste reduction, such as cutting back non-personal expenditure, international travel, cell phones and consultations with social partners that are said to be gathering momentum.
Meanwhile, measures introduced by the seven-month old New National Party (NNP) administration since taking up office in February are reaping benefits for Grenada, according to the Eastern Caribbean Central Bank (ECCB).
The latest quarterly report from the ECCB released on Monday said the Grenada economy has expanded in the first half of the year, influenced by developments in the construction and manufacturing sectors.
The report explained that construction activity has rebounded in the first half of 2013, recording positive growth for the first time since 2006.
According to the ECCB, the expansion in construction was also supported by growth in the public sector capital programme, as evidenced by the increased outlays for capital expenditure.
The report said public sector construction activity was primarily limited to the maintenance and rehabilitation of roads, schools and other public buildings.
In presenting the 2013 budget in Parliament in April, Mitchell announced stimulus measures to the construction sector by reducing value added tax (VAT) on a number of construction items to 5% from May 1, 2013, to December 31, 2014.
These included sand, cement, roofing materials, steel, lumber and construction blocks.
The report suggested that the pace of economic activity is projected to accelerate in the remainder of 2013.