When governments spend, someone has to pay. Across the Eastern Caribbean, the who and the how of revenue collection are revealing—and in some cases, worrying. As 2025 budgets roll out, the six countries face a common challenge: building fair, stable, and resilient revenue systems. But while some rely on a broad base of taxes, others lean heavily on volatile programs like Citizenship by Investment (CBI) or import duties from shrinking trade volumes. Let us unpack the region’s revenue mix.

### VAT: The Regional Workhorse

The Value Added Tax (VAT) is the dominant source of revenue across the ECCU. No surprise—it is efficient, hard to avoid, and pulls in revenue as long as people spend.

Country| VAT as % of Total Revenue
—|—
Saint Lucia| ~30% (up to 45% of tax revenue)
Antigua & Barbuda| ~30–32%
St. Kitts & Nevis| ~30%
Dominica| ~30–35%
Grenada| ~50% of tax revenue
SVG| ~25–30%
VAT remains the fiscal backbone, and there’s little appetite for raising rates. Instead, governments are doubling down on compliance. Antigua and Saint Lucia both launched crackdowns and amnesties; Grenada is digitizing systems.

### Income Taxes: Present in Some, Absent in Others

A major divergence exists on personal income tax. Antigua and St. Kitts have no personal income tax. Their systems rely almost entirely on VAT, customs duties, and business taxes.

Grenada, Saint Lucia, Dominica, and SVG all retain income taxes, though collections vary.

But direct taxes—corporate and personal—rarely surpass 20% of total tax revenue, even in income-tax countries. The region remains tilted toward indirect taxation, raising fairness concerns, especially as food and fuel prices remain elevated.

### Trade Taxes: Still Hanging On

Import duties, customs charges, and fuel excises remain significant, particularly in St. Kitts, Saint Lucia, and Grenada. But they are shrinking in relative terms. As trade liberalization and exemptions expand, so too do tax gaps. Grenada, for example, cut its property transfer tax to boost real estate, while Saint Lucia slashed its airport service tax by 50% to stimulate tourism.

### CBI

Four countries—Dominica, St. Kitts, Grenada, and Antigua—earn large non-tax revenues from Citizenship by Investment (CBI) programs.

Country| CBI Role in Budget (2024–25)
—|—
Dominica| Essential for funding airport, housing, energy
St. Kitts & Nevis| Plunged 2024 into deficit after CBI revenues fell
Grenada| Helped deliver 2024’s large surplus
Antigua| A steady source of revenue
While CBI funds have allowed for massive capital investments, they are non-recurring and vulnerable to international scrutiny. St. Kitts is already under pressure to reform its CBI program. The IMF and Eastern Caribbean Central Bank urge countries to treat CBI as a bonus, not a baseline.

### External Grants and Loans: The Hidden Hand

Some budgets—especially in St. Vincent and Dominica—lean heavily on external support. For example:

* SVG’s 2025 capital budget is larger than its entire revenue base, with over EC$900 million coming from loans and grants.
* Dominica’s international airport is primarily funded by China and a CBI-managed escrow facility.

These funds are vital for recovery and development, but the debt service burden is growing. In SVG, interest payments already account for 40% of current revenue.

### Takeaway:

The Caribbean tax model is still dominated by VAT, trade taxes, and, for some, CBI inflows. But as needs grow and pressures mount, the region faces a hard truth: it must broaden and modernize its revenue systems, or risk running deficits that no CBI windfall can fix.

**Prof. C. Justin Robinson** , a Vincentian and UWI graduate, holds a BSc in Management Studies, MSc in Finance and Econometrics, and PhD in Finance. With over 20 years at UWI, he has served in various leadership roles, including Dean and Pro Vice Chancellor, Board for Undergraduate Studies. A Professor of Corporate Finance with extensive research publications, he is actively involved in regional financial institutions and is currently the Principal of The UWI Five Islands Campus in Antigua and Barbuda.