The latest budget introduces several measures designed to strengthen economic growth, enhance resilience, and ease the cost of living. From tax breaks to new social benefits, these updates affect businesses, workers, and everyday citizens. Here’s a breakdown of the most important changes and what they mean for you.
Building a More Resilient Future
The government is repurposing the Catastrophe Fund into the Resilience and Regeneration Fund, ensuring better preparedness for climate-related challenges. Funding for this initiative will come partly from up to 50% of unclaimed assets, including dormant bank accounts.
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To support long-term resilience:
- Employee and self-employed contributions to the Resilience Fund will increase from 0.1% to 0.25%.
- The Special Needs Grant will expand from March 11, covering blind, deaf, or mute minors retroactively from October 1, with further expansion set for June 1.
- Foster care stipends will rise to $200 per child per week from April 1.
- 60 new Special Constables will be hired at a cost of $2M annually to improve security.
Economic Growth & Business Incentives
To support local businesses and attract investment, the government is introducing key incentives:
- Duties and VAT on commercial kitchen equipment will be waived for registered restaurants and cookshops from April 1, 2024, to March 31, 2027.
- Qualifying restaurants that earn over 60% of their revenue from foreign exchange will now benefit from hotel food and beverage concessions.
- To boost regional tourism, the Air Travel and Tourism Development Fee for regional passengers will be reduced from US$35 to US$20 (July 1, 2024 – June 30, 2026), costing $2.8M.
- Climate-smart agriculture will receive a boost with:
- Lease-to-own vertical farms and broiler tunnels through BADMC over seven years.
- Reduced water rates ($1 per cubic metre) for registered small farmers.
- Deposit insurance will now extend to credit unions, with an initial funding of $1.75M.
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Tax & Revenue Changes
Several tax-related adjustments aim to balance revenue collection with economic relief:
- Visitor permits will be abolished from July 1, costing $355,000.
- A $10 per day car rental levy will be introduced on July 1, expected to generate $13M annually.
- Late filing fees eliminated for tax returns with zero balances. Other tax adjustments include:
- $100 fee for personal tax returns.
- $250 fee for corporate tax returns.
- Penalties capped at 25% of tax payable.
- Five-day grace period for payments.
- $1M will be allocated annually to educate the public on non-communicable diseases.
Cost of Living & Well-being Initiatives
To ease financial burdens and improve quality of life, the budget introduces several key measures:
- A $5M Podiatry Project will enhance foot care services for citizens over 70 years old.
- The union membership allowance will increase to $360 annually, costing $600,000.
- A new $1,500 annual meal allowance will be exempt from income tax, saving workers $3.75M collectively.
- Households in St. Lucy and St. Peter affected by brown water issues will receive a $32 monthly ex-gratia payment, costing $2M, alongside the establishment of a Special Task Force for issue resolution.
- Tank and pump waivers have been extended until March 31, 2028.
- A 2% automatic national minimum wage increase will take effect January 1, 2026.
- A one-time $300 Solidarity Allowance will be paid in May via the NIS.
- Special Constables with over three years’ service will be automatically transitioned into full Police Service officers from FY2025/26.
- Maternity leave will increase to 14 weeks for single births and 17 weeks for multiple births, while statutory paternity leave (3 weeks) takes effect on June 1, with the cohabitation requirement removed.
- The VAT cap on fuel remains, activating when oil prices surpass US$80 per barrel.
- VAT exemptions from April 1 will now apply to:
- Stew beef, minced beef/pork/turkey, pineapples, barley, Vienna sausages, Horlicks, Saga, lentils.
- Import duty/VAT exemptions on pears (not avocados), ortaniques, mandarins, grapefruits, and plums.
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This budget aims to balance economic growth with social support, ensuring that businesses can thrive while citizens benefit from cost-of-living relief. With key changes in taxation, resilience funding, and public welfare, these measures will shape the financial landscape in the months and years ahead.
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