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HomeBanking/FinanceBUDGET ADDRESS FOR the FISCAL YEAR 2023/2024

BUDGET ADDRESS FOR the FISCAL YEAR 2023/2024

“Resetting to Ensure the Judicious use of Government’s limited resources”

Mr. Speaker, given the significantly increased expenditure to the Government as a result of all of the obligations, we are of the view that some of these costs should be recovered from the financial institutions which are currently regulated by the Government of Dominica. Therefore: Increase in Licenses for Offshore Banks: Mr. Speaker, with effect from January 1, 2024, the annual license for the operation of an offshore bank covered under the Offshore Banking Act, Chapter 73:02 of the 2017 Revised Laws of the Commonwealth of Dominica, will be increased from US$8,000.00 to US$25,000.00.

  • Increase in Licence Fees for Insurance Companies: With effect from January 1, 2024, the annual license fee for insurance companies operating under the Insurance Act Chapter 78:49 of the 2017 Revised Laws of the Commonwealth of Dominica will increase to
    EC$50,000.00.
  • Enforcement of Licence Requirement for Credit Unions: Mr. Speaker, the Financial Services Unit Act, Chapter 63:03 of the 2017 Revised Laws of the Commonwealth of Dominica prescribes the principal functions of the Director of the Financial Services Unit including supervising and regulating the operations of credit unions as defined under the Cooperatives Society’s Act, Chapter 78:03 of the 2017 Revised Laws of the Commonwealth of Dominica.
    The Financial Services Unit Act has also deemed these credit unions as financial institutions carrying out financial services business. Furthermore, the Financial Services Unit Act requires credit unions to obtain a license to operate. Presently, credit unions are operating
    without the license prescribed by the Act.
    Therefore, with effect from January 1, 2024, all credit unions which qualify to operate under the Cooperatives Society’s Act, Chapter 78:03 of the 2017 Revised Laws of the Commonwealth of Dominica, must obtain a license to operate. The license will be renewable annually on or before December 31 of every calendar year for the
    following year.
  • The fees for the license are as follows: For credit unions whose total assets are below $25.0
    million the license fee is $10,000 per year; for credit unions whose total assets are below $50.0 million but more than $25.0 million the license fee is $20,000 per year;
    for credit unions whose total assets are below $100.0 million but more than $50.0 million the license fee is $40,000 per year; for credit unions whose total assets are below $500.0
    million but more than $100.0 million the license fee is $60,000 per year; and for credit unions whose total assets are $500.0 million or above, the license fee is $100,000 per year.
  • In addition, we will increase the license fee for Money Service Business covered under the Money Services Businesses Act, Chapter 78:82 of the 2017 Revised Laws of the Commonwealth of Dominica as follows:
    Money Transmission businesses will pay a license fee of $15,000 annually, and Payday advances businesses will pay a license fee of $15,000 annually. These license fees will take effect on January 1, 2024.
    Debt Repayment Fund
    In the 2022/2023 Budget Address, the Honourable Prime Minister announced that Government will allocate some of the CBI revenue to debt repayment similar to what is done for the Vulnerability Risk and Resilience Fund. The government established the Debt Repayment Fund in April 2023 and will begin capitalizing that Fund during this Fiscal Year. In this regard, Government will impose a levy on the investments raised by the developers
    of CBI-funded private sector developments. The levy will be charged at a rate of US$5,000.00 per investor in the CBI Programme. This levy will take effect from September 1, 2023, and will be payable after approval of the citizenship and prior to the issuance of the Certificate of Naturalization to the investor and his/her approved dependents.
    Increase in licenses for CBI Agents and Promoters Mr. Speaker, we will implement a new license regime for the agents and promoters of the CBI Programme. In this regard, Government will issue new licenses to qualifying agents and promoters with effect from October 1, 2023. The fee for these licenses will be as follows:
     US$15,000 annually for non-resident agents; and
     US$10, 000 annually for non-resident promoters.
    Increase in Excise Tax on Alcohol and Tobacco
    In addition, Mr. Speaker, during our pre-budget consultations, a number of participants recommended increases in the tax on alcohol and tobacco to assist Government in maintaining the health system. Therefore, the government will increase the current excise tax rates on alcohol and on tobacco by 25 cents per litre and per kilogram, respectively. This increase will take effect on September 1, 2023.
  • Discontinuation of the Return Filing requirement for the Government
    For employees whose total taxable income is from employment as already mentioned, Government is also implementing several measures to reduce the operating cost of the public service including bulk procurement for commonly used items; and a reduction in the use of paper Cabinet has decided to ‘go green’ by November 1, 2023—that is, there will
    be no more paper submissions to Cabinet—all submissions will be made electronically through a secured system.
    In addition, we will bring to Parliament the necessary amendment to repeal the return filing requirement, in the Income Tax Act, Chapter 67:01 of the 2017 Revised Laws of Dominica, for individuals whose only source of income is from employment. This measure will be implemented in phases to allow sufficient preparation time for the private sector. The first phase will apply to Government employees with effect from income year 2024.
    Mr. Speaker, this means that a Government employee who receives only income from the Government will not be required to file an income tax return for income year 2024, which would have been due by March 31,
  1. The Inland Revenue will put the necessary administrative arrangements in place to ensure that qualifying employees continue to benefit from the tax deductions prescribed by the Income Tax Act.
    Increase in Fees for Marriage and Birth Certificates
    Mr. Speaker, presently the fee to obtain a birth certificate and a marriage certificate is $5.00 while the cost of the paper for each certificate, plus the cost of printing is in excess of $30.00. With effect from August 1, 2023, the cost of birth, marriage, and death certificate will be $20.00.
    Review of Tax Policy on Petroleum Products
    Mr. Speaker, the current tax policy on petroleum products has been in place
    for approximately 20 years, but the change in the name of the taxes when we introduce the excise tax in March 2006. Prior to the introduction of the excise tax, the consumption tax plus the sales tax on gasoline amounted to the same $3.00 excise tax per gallon of gasoline that we pay today; and $2.38 per gallon of diesel which we currently pay. Additionally, in July 2008, Government removed the 45 cents excise tax and the customs service charge on Liquified petroleum.
    Mr. Speaker, we are of the view that the time has come for a review of the tax regime on petroleum products. Therefore, Government will appoint a task force to review the current rates and system of taxation as well as provide recommendations for the implementation of a modern tax regime that is equitable and fair. We intend to report to Parliament, the findings and recommendations of this exercise, by January 2024.
    THE TRANSITION FROM CREAD
    Mr. Speaker, in accordance with the Climate Resilience Act of 2018, the Climate Resilience Execution Agency’s (CREAD) tenure is due to end in December 2023. CREAD was created in the aftermath of Hurricane Maria which devastated the island in September of 2017 to provide coordination and leadership to the country in its pursuit to rebuild the island as the first climate-resilient nation in the world.
    Mr. Speaker, our Government is proud of the many accomplishments of CREAD, particularly in the manner in which it has worked with the communities, international agencies, and line ministries within the Government. CREAD has performed remarkably over the past four (4)
    years. Many international bodies and agencies have indicated a very strong interest in the work of CREAD and have also documented its work through the use of multimedia and in writing. Most recently a delegation from Providencia Columbia spent a week in Dominica to learn of Dominica’s resilience journey.
    We thank our international and regional partners who assisted us with the establishment of CREAD, as well as, the multi-lateral organizations, wellwishers, advisers, and staff who have supported CREAD. Our sincere and special thanks are extended to the Governments of Canada and the United Kingdom who assisted with the funding and supervision of CREAD. The level of success attained, could not have been achieved without their leadership and support.
    The work of the Agency remains very relevant and important to achieving our ambition to be the first climate-resilient nation in the world by 2030. Therefore, some of CREAD’s activities are being systematically handed over to other Government agencies and the private sector. The remainder of CREAD’s activities will continue in a Resilience Unit within the Ministry responsible for economic planning. SEE ATTACHED FULL BUDGET ADDRESS
  2. https://natureisle.news/wp-content/uploads/2023/07/Fiscal-Year-2023_2024-Budget-Address-_July-25-2023_230725_122806.pdf
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