Baby wipes and no new taxes

Baby wipes, computers, pensioners, employees who employ new workers, Roseau sidewalks, bridges and houses. These are among a number of places, things and people who were highlighted in the Budget Address that Prime Minister Roosevelt Skerrit delivered to Parliament on Wednesday 23rd July 2014.

After detailing his Government's successes ministry by ministry, sector by sector, Prime Minister Skerrit declared that Dominica's Growth Domestic Product (GDP) was estimated to grow by 0.8 percent in 2013 and by 1.5 percent in 2014.

"Our target is for an annual average growth rate of 3.0 percent. The main contributors to that growth were agriculture, construction, manufacturing and tourism," Skerrit said.

In a review of the economy Prime Minister Skerrit said tourism, construction and manufacture were the main drivers of the Dominican economy.

"The construction sector has been supported through a series of Government policies. The Housing Revolution has been a major factor in construction," he said. "The infrastructural works undertaken by Government is likely the most significant contributor to the construction sector. In 2010, growth in that sector was estimated as high as 8.7 percent. However, it is estimated that output in the sector fell by 2.0 percent in 2013 because some large infrastructural projects were coming to an end."

In tourism, Skerrit said "preliminary estimates suggest that from a 1.6 percent decline in 2012, activity in the sector strengthened during 2013 with estimated growth of 2.0 percent."

He added that "activity within the manufacturing sector has remained positive for the last three years. Output has been robust, with strong gains in soap, beverage, and paint production" and "in 2013 growth is estimated at 3.4 percent". Growth of that sector for 2014 is expected to be 2.0 percent.

In a response to the unemployment situation in Dominica, PM Skerrit said his Government "proposes to offer a rebate to businesses who engage new hires during the period 1st August 2014 to 31st July 2015 in the first instance. For a business to qualify for a rebate, the new hires must be engaged in new jobs; not replacement, acting or temporary jobs. The rebate will be equivalent to 2% of the gross salary paid to a new hire."

To boost the use of Information and communication technology, the prime minister said his Government has decided to remove the import duty of 5% and the customs service charge of 3% applied to computers.

"It means that only the VAT and the Environmental levy will be applied to computers on importation," Skerrit said.

In a move that has inspired the opposition to derisively label the 2014-2015 budget as "a baby wipes budget", Prime Minister Skerrit proposed changes to the current taxes on baby wipes and disposable diapers.

"We are conscious of the changing dynamics in caring for children and the elderly," he said. "There are two products that are more widely used than before; one is baby wipes and the other is disposable diapers. Baby wipes are now classified in the same category as soaps. In an effort to protect the local production of soap, the tariff on all items in this category is high at 65 percent. Baby wipes however are not manufactured in Dominica, and thus cannot be considered as an actual threat to the soap manufacturers. We have decided to remove the import duty on the baby wipes and to set the rate at zero.

"In regard to disposable diapers, the import duty rate is 20%. In a previous budget, this Government reduced the rate for baby disposable diapers to zero. There is no threat to local production as that item is not produced locally. We have decided to remove the import duty on adult disposable diapers and set the rate at zero".

As part of the Government's capital budget for the current fiscal year, PM Skerrit said he expects to see the commencement of the infrastructural works under Phase one of a few projects.

"In Roseau, the works will focus on road rehabilitation and drainage improvement inclusive of sidewalks and street lighting on the Dame Eugenia Charles Boulevard (Bayfront) and all streets in-between up to Hanover Street. The works will be undertaken in an incremental manner so as to minimize the inconvenience to the general public," the Prime Minister said. "Discussions are ongoing for the construction of an administrative office building in Portsmouth and it is expected that the Dominica Social Security will finance the construction and will lease space to the Government. In addition, major rehabilitation works are being undertaken at Harbour Lane and Rodney Streets and paving work will begin on the Lagoon to Purple Turtle section of roadway."

Additionally, Prime Minister Skerrit said his government has decided to remove the VAT on the service charge which is charged by the hotels.

Some taxpayers, about 1508 of them, would have been satisfied with the Government's 2013-2014 budget because their take-home salaries has increased.

"Effective 1st January 2015, the non-taxable allowance will be increased from $20,000 per annum to $25,000 per annum. As a result of this policy anyone earning $25,000 and less per annum or $2,083 or less per month will not pay personal income tax," the Prime Minister said.