Tax revenues in the British Virgin Islands have been experiencing a steady surge when compared to figures in 2020, with taxes on goods and services increasing by more than $4 million while taxes received on money transfers are set to top over $2 million by year end.
This is according to Premier and Minister of Finance Andrew Fahie, who made the disclosure while delivering the 2022 National Budget in the House of Assembly.
The premier said these figures speak to the measures that his government implemented during the heightened periods of the COVID-19 pandemic, which has now resulted in the BVI returning to levels that others felt would never have occurred, especially at this present point.
He said, “There were those who were saying at this time that other places were eating our lunch. But I am here to say today that because of the measures that we have put in place, we not only now have our lunch back; we have the entire store to get breakfast, lunch and dinner.”
“For 2021: Hotel Accommodation Tax revenue for 2021 is estimated at just below $2 million; Taxes from Motor Vehicle Rentals are estimated at $92,000 -more than 2020 figures; Cruising permits revenue is estimated at $1.79 million; which is close to 2020 figures; Passenger tax (Sea) is estimated to rise at $442,000; up from $407,000 in 2020; and, Tourist Arrival Levy revenues are estimated at $840,000, compared to $691,000 for 2020. We are on our way back,” the premier asserted.
BVI’s economy remains stable and resilient – Small businesses on the climb
The finance minister also said that the BVI’s economy was still in a very strong position, being stable despite the many challenges experienced over the last four years.
This was backed with the increase in tax revenues on international trade which rose by more than $3 million and the revenues generated from trade licenses which he said increased from 2020 by over $100,000 to now stand at over $1 million.
“For 2021: Income and Payroll Tax increased by approximately $500,000 over 2020’s revenue to $48.6 million; Taxes on Goods and Services increased by $4.67 million over 2020 receipts to $210.3 million; Taxes on International Trade increased by $3.69 million over 2020 receipts to $39.62 million; Revenues from Money Transfer Fees are estimated at $2.315 million and Customs Fees at $350,000; Revenues from Trade Licenses also increased to over $1 million from $906,000 in 2020,” he detailed.
“This is indeed an encouraging sign for our aspirations of growing our small business sector, even during this COVID-19 era. In other words, the entrepreneurial spirit in the Virgin Islands is highly stimulated, it’s alive. History shows that the people of the Virgin Islands become stronger when faced with adversities,” Fahie explained.
Growth Attributed to grants injection during 2020
The premier attributed the increased tax revenues to the monies injected into the economy during the height of the pandemic in 2020, where his government pumped millions of dollars into businesses to prevent them from closing.
“The projected improvement in economic activity in 2021 came as no surprise following the stimulation of the economy from the roll-out of a $40 million grant from the BVI Social Security Board (BVISSB) in the third quarter of 2020. Do keep in mind that $10 million from the BVISSB grant was placed into an unemployment relief fund and managed by BVISSB. Also, $7.5 million from the grant was paid to the National Health Insurance (NHI), where from the inception previous Governments had been delinquent in making payments,” he stated.
He added, “Along with the economic stimulus package, your government also injected resources into the economy by advancing the roll-out of a number of public sector capital projects. The combination of these two measures — the grant and the capital projects — resulted in a vitamin boost for economic activity across many sectors leading to a 2.2 percent upward revision of the projection for the overall growth in 2021 over 2020, compared to the 7.5 percent contraction that was first forecasted.”