OP-ED
THE UWI FIVE ISLANDS CAMPUS OECS BUDGET WATCH 2025
“WHO PAYS THE BILLS? TAX AND REVENUE REALITIES ACROSS THE EASTERN CARIBBEAN”
By Professor C. Justin Robinson
Pro Vice-Chancellor and Principal, UWI Five Islands Campus
When governments spend, someone has to pay. Across the Eastern Caribbean, the who and the how of revenue collection are revealing—and in some cases, worrying. As 2025 budgets roll out, the six countries face a common challenge: building fair, stable, and resilient revenue systems. But while some rely on a broad base of taxes, others lean heavily on volatile programs like Citizenship by Investment (CBI) or import duties from shrinking trade volumes. Let us unpack the region’s revenue mix.
VAT: The Regional Workhorse
The Value Added Tax (VAT) is the dominant source of revenue across the ECCU. No surprise—it is efficient, hard to avoid, and pulls in revenue as long as people spend.
| Country | VAT as % of Total Revenue |
|---|---|
| Saint Lucia | ~30% (up to 45% of tax revenue) |
| Antigua & Barbuda | ~30–32% |
| St. Kitts & Nevis | ~30% |
| Dominica | ~30–35% |
| Grenada | ~50% of tax revenue |
| SVG | ~25–30% |
VAT remains the fiscal backbone, and there’s little appetite for raising rates. Instead, governments are doubling down on compliance. Antigua and Saint Lucia both launched crackdowns and amnesties; Grenada is digitizing systems.
Income Taxes: Present in Some, Absent in Others
A major divergence exists on personal income tax. Antigua and St. Kitts have no personal income tax. Their systems rely almost entirely on VAT, customs duties, and business taxes.
Grenada, Saint Lucia, Dominica, and SVG all retain income taxes, though collections vary.
But direct taxes—corporate and personal—rarely surpass 20% of total tax revenue, even in income-tax countries. The region remains tilted toward indirect taxation, raising fairness concerns, especially as food and fuel prices remain elevated.
Trade Taxes: Still Hanging On
Import duties, customs charges, and fuel excises remain significant, particularly in St. Kitts, Saint Lucia, and Grenada. But they are shrinking in relative terms. As trade liberalization and exemptions expand, so too do tax gaps. Grenada, for example, cut its property transfer tax to boost real estate, while Saint Lucia slashed its airport service tax by 50% to stimulate tourism.
CBI
Four countries—Dominica, St. Kitts, Grenada, and Antigua—earn large non-tax revenues from Citizenship by Investment (CBI) programs.
| Country | CBI Role in Budget (2024–25) |
|---|---|
| Dominica | Essential for funding airport, housing, energy |
| St. Kitts & Nevis | Plunged 2024 into deficit after CBI revenues fell |
| Grenada | Helped deliver 2024’s large surplus |
| Antigua | A steady source of revenue |
While CBI funds have allowed for massive capital investments, they are non-recurring and vulnerable to international scrutiny. St. Kitts is already under pressure to reform its CBI program. The IMF and Eastern Caribbean Central Bank urge countries to treat CBI as a bonus, not a baseline.
External Grants and Loans: The Hidden Hand
Some budgets—especially in St. Vincent and Dominica—lean heavily on external support. For example:
- SVG’s 2025 capital budget is larger than its entire revenue base, with over EC$900 million coming from loans and grants.
- Dominica’s international airport is primarily funded by China and a CBI-managed escrow facility.
These funds are vital for recovery and development, but the debt service burden is growing. In SVG, interest payments already account for 40% of current revenue.
Takeaway:
The Caribbean tax model is still dominated by VAT, trade taxes, and, for some, CBI inflows. But as needs grow and pressures mount, the region faces a hard truth: it must broaden and modernize its revenue systems, or risk running deficits that no CBI windfall can fix.
Prof. C. Justin Robinson, a Vincentian and UWI graduate, holds a BSc in Management Studies, MSc in Finance and Econometrics, and PhD in Finance. With over 20 years at UWI, he has served in various leadership roles, including Dean and Pro Vice Chancellor, Board for Undergraduate Studies. A Professor of Corporate Finance with extensive research publications, he is actively involved in regional financial institutions and is currently the Principal of The UWI Five Islands Campus in Antigua and Barbuda.
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Yeah yeah ! Create new taxes! Raise existing ones! More money to waste! This was so successful everywhere else! Thank you Professor for this great idea! lol
So when revenue start drying up from taxes, then you simple shrink the government as well.
Too many yes people in government walking around doing hardly anything and bringing nothing to the table, they are just piggybacking on others ideas and getting a salary.
When is Government going to get slash across the board in Antigua?
Antigua will save a bunch of money that way. Too many senators and government officials. Start there.
Interesting article by Professor Robinson which suggests the need for looking towards other methods of increasing revenue.
I know it is most likely unpopular, but fines for speeding and dangerous driving would help to bring in revenue for this government. I do think that the roads in Antigua have become particularly dangerous. They are increasingly congested, with drivers speeding, pulling out dangerously, overtaking when they really shouldn’t..and the list goes on. I do believe it would reduce accidents and save lives too.
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