IMF Warns Grenada Against Offering Future Tax Amnesty

• The International Monetary Fund (IMF) has advised the Government of Grenada not to continue a tax amnesty programme implemented on 1 January and scheduled to conclude on 31 December 2023.
• “We emphasised several times to the Government that this one should be the last one; it should be very deeply rooted in people’s minds and those who are owing tax to the Government that this should be the last one,” said Huidan Lin, IMF Mission Chief for Grenada, in the just concluded Article IV consultation of the IMF’s Articles of Agreement.
• Both parties (IMF and Govt. of Grenada) asserted that although amnesties are sometimes good, it is not the ultimate solution to the problems that are faced in taxation and thereby cannot offer a permanent remedy.
• The tax amnesty was announced in the presentation of the 2023 budget statement by then Finance Minister Dickon Mitchell. He explained that over EC$777Mn in outstanding taxes are owed, along with late fees, and penalties, and the amnesty is aimed at settling money owing to the Government.
• The IMF has indicated that the Government does not only have to say that there will be no more amnesty, but it also has to step up on enforcement of the Tax Administration law. The efficiency of the tax system can be improved through an update to its tax incentive framework and increased risk-based internal auditing of the customs administration.

(Sources: IMF & Now Grenada)