By Caribbean News Global
TORONTO, Canada – The government of Dominica tabled the fiscal year 2021/22 appropriate for $993.6 million last Wednesday, July 28, 2021, of which $438.9 million is allocated to the government’s public sector investment programme, strengthening the theme “Dynamic Dominica – Building on the Past, Solidifying our Present and Securing the Future”.
“In this year’s public sector investment programme, government will advance projects geared towards the continued diversification and transformation of the economy. The development of the international airport was featured as the single most prominent project, with an estimated expenditure of $75 million.”
The ministry of finance received the highest allotment, of approximately 40 percent of the budget for debt service, retirement benefits and salary payments. Education was the second-highest investment with 11.8 percent, followed closely by the health sector, which saw an allocation of 9.2 percent of the budget.
New tax exemptions – August 1, 2021
Prime minister of Dominica and minister for finance, Roosevelt Skerrit announced new reduction in duties and taxes as government continues to work to improve the standards of living for citizens.
“As of August 1, 2021 exemption of Value Added Tax (VAT) on hatching eggs (classified under Custom Tariff Heading HS 0407.10) will come into effect as one of the major challenges faced by poultry farmers is the sourcing of chicks” prime minister Skerrit, announced: “The poultry farmers of Dominica have been working very hard to ensure that Dominica can sustain itself with the supply of eggs and chicken. One of the many challenges is their ability to source chicks. They have had to procure and transport chicks from other countries which have proved to be at times difficult and costly. Poultry farming is a growing industry in Dominica. We are well on our way to becoming self-sufficient with the supply of whole chicken. As a government, we must continue to support these farmers and create the environment to increase production where possible.”
Prime minister and minister for finance, Skerrit, noted that this exemption will result in reduced cost for the famers and increase in produce for the local market.
“This will encourage existing farmers and other interested individuals to set up hatcheries to supply chicks. Therefore, instead of importing day old chicks, we will be importing fertilized eggs and they will be hatched in Dominica which will result in reduced costs to the farmer and more competitive prices of chicken and eggs on the local market,” resulting in “increase job opportunities that will also be created with the operation of these hatcheries,” explained prime minister Skerrit.
Exemption of income tax on residential rent income
Another major announcement made in the 2021-2022 budget is the exemption of income tax on residential rent income, in a bid to welcome more investments in land and home ownership which will benefit the country in the long term.
“We are aware that many of these rental properties are owned by the salaried workers and pensioners who have paid or are already paying their fair share of income tax. They have taken their after-tax income and have invested in these properties to augment their income and pensions. This government would like to further encourage these types of investments as they benefit not only the landlords but the country by increasing construction activity, assisting with housing our people, increasing the room stock available to visitors, creating short term and long-term employment; and as a result contribute to the growth and development of our country.
Tax exemptions to students
Tax exemptions were also extended to students and/or parents who will now be able to claim all of the interest paid on their student loans.
“In 2002, this government introduced a measure which allowed students or their parents to claim an annual income tax deduction for interest paid on student loans at a maximum of $5,000 per student,” said prime minister Skerrit. “We are aware that the cost of education has increased significantly since this measure was first introduced. To further invest in our students and foster education and training, the government has decided to allow students or their parents to claim all of the interest paid on their student loans each year. The measure will take effect from January 2022 to coincide with the income year,” the prime minister stated.
Tax deduction of $8,000 on premiums
A maximum tax deduction of $8,000 on premiums paid to insure homes was also announced noting that this deduction is to build financial resiliency among citizens.
“This government has already declared that we must build a resilient Dominica. This entails building resilience at the individual level, within families and businesses. As I have mentioned on several occasions, having the necessary financial reserves in place to assist in response and recovery, for example, savings and insurances, is critical to achieving resilience. In order to assist individuals with their resilience plans, in particular, ensuring that they are insured, the government proposes to allow individuals, an income tax deduction for premiums paid to insure their homes. The maximum deduction to be allowed is $8,000. This measure will take effect from the income year 2022,” said prime minister Skerrit.
Income tax deduction on individual or family health insurance
The government will also offer an income tax deduction on individual or family health insurance premiums effective from the income year 2022.
“A resilient nation requires a healthy people. The government has made significant advancements in healthcare facilities, equipment, services, and specialists at the primary, secondary and tertiary levels. As individuals, we must invest in and prioritize our personal health. This means eating right, maintaining an exercise regime, and having adequate health insurance. The government is now offering to individuals a health insurance income tax deduction. This deduction will be in respect of individual or family health insurance premiums paid and will take effect from the income year 2022. The support for health insurance is a corollary to our efforts in quality health care and service delivery,” said prime minister Skerrit.
Housing sector – CBI
During the fiscal year of 2021-2022, the housing sector saw an investment of $50 million. Approximately, 58 percent of the capital budget in the fiscal year 2021-2022 will be funded by resources from the island’s Citizenship by Investment (CBI) Programme, noted prime minister Skerrit. “It is clear that the CBI programme continues to have a positive, life-changing impact on our people and the economy, and indeed justifies its own existence,” noted prime minister Skerrit.
- With a file from GIS Dominica