IMF Warns That Recently Announced Temporary ABST Cut Could undermine fiscal targets

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ABST TAX CUT

IMF Flags Risks in 2026 Budget as Temporary ABST Cut Clouds Revenue Outlook

The International Monetary Fund has cautioned that Antigua and Barbuda’s 2026 Budget faces risks to its revenue outlook, warning that a recently announced temporary cut in the Antigua and Barbuda Sales Tax (ABST) could undermine fiscal targets if not promptly reversed.

In a concluding statement following its Article IV consultation mission, IMF staff said that, based on its baseline macroeconomic assumptions, implementation of the 2026 Budget would imply a primary surplus of about 1.6 percent of gross domestic product, placing it within the authorities’ fiscal resilience target range of 1½ to 2 percent of GDP.

However, the IMF noted that this estimate does not take into account the government’s announcement of a temporary reduction in the ABST rate from 17 percent to 7 percent, as the timing and duration of the measure have not yet been specified.

Staff warned that the tax cut is likely to weigh on revenue performance, at a time when Antigua and Barbuda is seeking to strengthen fiscal buffers, reduce financing needs and place public debt on a firmer downward path.

Despite recent gains, the IMF said underlying revenue collection remains below the authorities’ own objectives and lags behind regional peers. It stressed that promptly restoring the ABST rate would be necessary to make progress toward the government’s target of raising tax revenues to about 20 percent of GDP and sustaining a primary surplus consistent with medium-term fiscal goals.

The Fund said stronger and more durable revenue mobilization would help ease financing pressures, support debt reduction efforts and improve resilience to economic shocks, while cautioning that reliance on temporary or one-off measures could weaken the credibility of the fiscal framework.

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8 COMMENTS

  3. The IMF cannot be that stupid. By now they should understand the political game. Gaston will be making the cut in order to win the next election and after that the ABST will go back to 17% plus other taxes so he will more than make up for the shortfall. After that it’s going to be fire and steel in our asses

  4. @Visionary

    Just as Harold said. The Useful idiots did not read his article and neither do they think for themselves.

    What a pity.

  5. Well said @Visonary and Idiots.It is all about buying votes.UNITED STATES of AMERICA the largest economy in the WORLD national DEBT is 38.4 trillion US DOLLARS and climbing with a DEBT TO GROSS DOMESTIC PRODUCT OF 108% and THE AMERICANS PAY TAXES.NOTE:article in ANTIGUA NEWS ROOM dated 8th december 2025 PRINGLE WARNS REGIONAL AND INTERNATIONAL LENDERS TO USE EXTRA DUE DELIGENCE BEFORE ISSUISING LOANS TO THE ANTIGUA GOVERNMENT.

  6. The IMF, World Bank and other international and regional lending/loaning institutions ought to investigate the CLICO/BAICO debacle that is ongoing for over 17 years people are dying prematurely unable to meet their daily needs such as nutrition and medication. Note that the Caribbean Court of Justice (CCJ) delivered justice on the case of BAICO (AGOJ 2024/001) Ellis Richards and others versus Republic of Trinidad and Tobago on 22nd October 2024. Just 2 days later, on 24th October 2024, Antigua and Barbuda’s Prime Minister, Gaston Browne was quoted in an article of Antigua News Room, that he was not surprised by that ruling of the CCJ. However and henceforth, the Government of Antigua and Barbuda is responsible and obligated in paying the CLICO/BAICO policy holders in Antigua and Barbuda, in accordance with the ruling of the CCJ in Trinidad and Tobago. Also unpaid obligations to teachers, contractors, vendors, landlords and LIAT (1974) Ltd.’s workers’ severance.
    The Antiguan and Barbuda Government is creating a misleading picture of their nation’s financial state. Any external and regional lenders/loaners must be aware of the ongoing debacle by the government of ANTIGUA and BARBUDA. All outstanding monies owed must be addressed in order to stimulate economic activity in the country. These issues would be addressed at the ELECTORATE.

  7. “When a country borrows money merely to present a FACADE to the rest of the world and that is to say,look how rich we are in foreign exchange,debt to gross domestic product 61%,a surplus of 200 million EC dollars,tax free salary,free tertiary education,free turkey and ham,soon G.B will be offering free sanitary napkins and pampers.If that foreign exchange springs from loans,you really are not acheiving anything that is WORTHY of PRAISE.It is all about buying VOTES to maintain POLITICAL POWER.There is nothing FREE in this world the only thing that is FREE is the AIR that we breathe.

  8. @Abena and @Teabag no profanity it appears your vocabulary is limited. For your information the LARGEST CONTRIBUTOR TO THE INTERNATIONAL MONETARY FUND (IMF) is the UNITED STATES of AMERICA,which holds approximately 82.99 BILLION SDRs (special drawing rights),accounting for about 17.42% of the total quota shares.This significant shares gives the U.S. considerable influence over the IMFs governance and policy direction.Following the U.S.,JAPAN and CHINA are the next largest contributors,each holding between 5.5% and 6.5% of the total quota of SHARES. Americans pay TAXES.GASTON BROWNE would have to comply to the IMF policy or go to RUSSIA, CHINA or NORTH KOREA for future LOANS.

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