Prime Minister and Minister of Finance Godwin Friday says that his government will enforce tax collection rather than raise taxes amidst the high risk of debt distress that St. Vincent and the Grenadines (SVG) has been facing since 2016.
Friday reiterated his position during a joint press conference with the International Monetary Fund in Kingstown on Tuesday, as the Washington-based international financial institution gave its outlook on the Vincentian economy.
“The revenue strategy we’ve discussed… modernising and reforming our tax system. One of the areas that we’ve identified, of course, is the property tax enforcement,” he said.
“We said this in our budget presentation in the parliament, where I’m told that the current compliance rate is 20%, which is quite well, as I say, it’s low. It’s an understatement,” the prime minister said.
He said that properly enforcing existing laws could significantly boost revenue without adding new burdens.
“… essentially making the system work without changing rates and without adding any additional burdens, but simply enforcing it would be an approach that we will adopt to enhance our revenue strategy.”
Friday also referred to a broader effort to modernise the tax system, but did not elaborate.
As regards expenditure, the prime minister said his government will review major recurrent spending at the same time as trying to growth the economy out of the current situation.
“We know that as part of the challenge that expenditure rationalisation will take place. We have to look at the big-ticket items, like the wage bills, pensions and subsidies and so forth.
“And we’ve had discussions about those, but we also understand that productive investments in sectors such as agriculture and tourism and the blue economy also can yield growth that will help us to grow out of the situation that we are in, as well.”
Responding to a subsequent question from the media, the prime minister emphasised private sector–led growth:
“We are focused now on generating investments that take the private sector… to lead in the development effort, both domestic and international, foreign direct investment,” Friday said.
“We also have identified … sectors of the economy which we campaigned upon, that we are going to focus our efforts on the productive sectors. That is agriculture, tourism, which has had considerable growth in the past two or three years. The blue economy — tremendous potential there,” Friday said.
Friday led the New Democratic Party to a 14-1 victory over the Unity Labour Party in the November 2025 general election, ending 25 that party’s 25 years in power.
The new government inherited a country with a national debt of EC$3.5 billion as of Dec. 31 2025 and a debt-to-GDP ratio of 113-120% according to World Bank data.
As regards restructuring and managing the high debt burden, Friday outlined a strategy that combines debt management operations, fiscal adjustment, and new revenue initiatives, including a citizenship by Investment (CBI) programme.
“We have a situation where we have high debt. … The scope for government to get involved in a lot of the investments that they have done in the past are quite limited because… we don’t have the fiscal space to enable us to do so,” the prime minister said.
Private-sector-led investment
He said his government would focus on private-sector-led investment, domestic and foreign; debt swapping and refinancing; and a carefully targeted CBI programme.
“In terms of managing the debt as well… we are looking for ways in which to reduce the debt burden by negotiating ways of swapping more expensive debt for cheaper debt,” he said.
While the government is engaging with its partners — bilateral and otherwise — in finding ways in which to manage its obligations, Friday said the government intends to meet those obligations.
He, however, emphasised the goal of creating fiscal space “to be able to continue to manage the necessary functions of government, but also to invest”.
Introducing a CBI programme was among the promises the NDP made to voters in last November’s election, noting that it would not add to the nation’s debt.
During the press conference, Sergei Antoshin, the IMF mission chief for SVG, said a CBI programme could “modestly increase fiscal revenue” but also carries risks and must be designed carefully.
“The goal of the programme would be to maximise fiscal revenue,” Antoshin said.
Friday said the government’s priority would be to use CBI revenues to address sovereign debt and fund capital projects, rather than current expenditure.
“I agree with the advice, … — I’m not saying 100% — but certainly our priority with revenues from that source would be, as has been done in other countries in the region, to address the sovereign debt and also to invest in capital projects, rather than in trying to use it as to meet current expenditure,” Friday said.
The prime minister said the country’s current growth forecast of about 2.7% annually is insufficient to address the scale of its fiscal and social challenges.
“We need to do it faster than that, and we have ways in which we think we can do so, and we’re going to do everything we can to ensure we put them in place as soon as possible.”
He described growth, debt sustainability, and social protection as interlinked objectives.
“It’s only sustainable if we can maintain a system that ensures that we are able to pay our debt, that we are able to invest in the productive sectors of the economy, and able to make the investment in infrastructure that then generates further growth,” the prime minister said.
“These are all challenges that we are quite aware of.”
