In a sharply framed analysis from Richard W Duncan OBE — a retired senior finance official, former Accountant General, and current Ministry of Finance advisor — the long, fraught path to Grenada’s hard-won fiscal maturity is under fresh threat from a poorly conceived, election-driven income tax policy proposal ahead of the 2026 general poll.
Duncan coins the term “fiscal blasphemy” to describe deliberate disregard for decades of hard-earned public finance prudence forged since 1986, through the turmoil of industrial unrest, persistent budget shortfalls, and multiple structural adjustment programmes including both IMF-mandated frameworks and the landmark home-grown 1995 adjustment plan that restored Grenada’s international credit standing, rebuilt investor confidence, and unlocked critical donor funding for public sector infrastructure projects.
Drawing on first-hand archival accounts from his 1996 publication *Walking the Straight and Narrow — Issues and Perspectives in Grenada’s Public Administration*, Duncan recounts a 1995 meeting with then-Prime Minister Dr Keith Mitchell and top finance ministry staff, where Mitchell announced a pre-planned pledge to abolish income tax without prior technical analysis, and explicitly stated he did not require the finance ministry’s input on the policy’s feasibility. That unvetted, politically motivated gambit, Duncan notes, led to the total squandering of the home-grown structural adjustment programme’s hard-won gains: successive administrations began reckless borrowing to cover recurring deficits, issued unvetted state guarantees to questionable local and foreign investors that later swelled public debt, and even obfuscated true debt metrics by redefining public debt categories and only referencing debt-to-GDP ratios rather than disclosing full nominal debt stock to avoid public scrutiny.
Duncan contrasts that historical recklessness with Grenada’s robust, multi-year economic upswing that predated the COVID-19 pandemic and persists today, as independently verified by the IMF’s Article IV reports, Eastern Caribbean Central Bank assessments, Caribbean Development Bank data, and Fiscal Resilience Oversight Committee findings. The current strong macroeconomic landscape — marked by record-low unemployment, surging tourism arrivals, booming public and private construction, targeted cost-of-living support measures, near-historic low non-performing loan rates across local financial institutions, and ample system liquidity — rests on a carefully calibrated three-pillar tax system of income tax, import duties, and VAT, anchored by a suite of robust 2014 and 2015 public finance laws governing fiscal responsibility, public debt management, and public procurement.
Duncan calculates that the newly proposed uncosted income tax overhaul would cost upwards of $90 million annually, a gap that would force policymakers to either slash critical public services or repeal the landmark Fiscal Resilience Act, derailing the country’s 2027 fiscal restoration targets and plunging Grenada back into the cycle of debt and fiscal instability it spent decades escaping. Instead of sweeping, unplanned tax overhauls, Duncan advocates for targeted, evidence-based incremental improvements to the existing income tax regime, including expanded digitisation of tax administration, better taxpayer support services, upskilling and fair remuneration for tax agency staff, and stricter enforcement to boost compliance. He concludes with a cautionary note that the country must not allow short-term political election pressures to erase the decades of progress that delivered its current unprecedented fiscal stability.
Déjà vu: Why “fiscal blasphemy” should be rebuked
