Montserrat Citizen Raises Concerns Over Tax Burden, Calls For Reform

A Montserrat resident has written to the Office of the Premier raising concerns about the island’s personal income tax system, arguing that it places an unsustainable burden on residents and requires urgent review.

In a letter dated April 7, 2026 and copied to multiple government ministries, the writer said the current system does not reflect the economic realities faced by many on island.

“I am writing to share my concerns about how personal income taxes are currently handled by the IRD,” the letter states, adding that the issues were outlined in point form “to keep things clear and efficient.”

Among the key concerns raised is the current personal allowance of EC$18,000. The writer argues that while the allowance was recently increased, “this is still not enough. It does not cover basic living costs for individuals, let alone families.”

The letter compares Montserrat’s system with other jurisdictions, noting that “in the UK… the allowance is £12,570, which equals about 45,017.73 XCD,” while “in Antigua, the allowance is 36,000 XCD,” with lower tax rates applied to income above that threshold. It also points out that “other British Overseas Territories like Anguilla and the BVI do not tax residents at all,” and that “St. Kitts and Nevis… also do not tax their residents’ personal income.”

“Given these examples, it is hard to understand why Montserrat enforces a system that is harsher than nearby islands, other BOTs, and even the UK,” the writer said, adding that this places “a heavy burden on residents.”

The absence of child-related tax relief is another issue highlighted. “In the UK and many other countries, parents receive a tax credit… for each child living at home,” the letter notes. “However, we currently receive no real monetary support through the tax system.”

The writer also calls for tax deductions on medical expenses incurred overseas, stating that many residents must travel abroad for treatment not available on island. “These treatments are not optional, they are necessary for people to live properly,” the letter says, citing examples such as cancer treatment, dialysis and hip replacements.

Concerns were also raised about the sustainability of the social security system, with a proposal to allow individuals to opt out and instead contribute to personal retirement savings plans through local financial institutions. The letter suggests these contributions should be tax-deductible, with penalties applied for early withdrawal.

The writer argues that the overall tax burden is significantly higher when combined with other charges. “Last year, my income would be considered below the poverty line in many countries, yet I still paid 25% in taxes,” the letter states.

“In addition, we pay 15% consumption tax… plus very high import duties, and another 15% toward a social security system that may not survive. Altogether, this means some people are taxed at least 55% or more of their income.”

The letter also challenges the notion that current tax levels are required in exchange for UK support, stating that “this does not seem sustainable… especially when that aid is tied to projects that have not been successful.”

The writer warns that the current system could impact population retention and investment. “If we want people to move to Montserrat and invest here… these issues must be addressed. Otherwise, people will continue to leave.”

The letter concludes with a call for both the Government of Montserrat and the UK Government to prioritise tax reform, stating: “If we want full tax compliance… we must consider how to make the system fair in an economy that is struggling and changing.”

Copies of the letter were sent to the Governor’s Office, the Ministry of Finance and Economic Management, and other government departments, as well as the Inland Revenue Department.

Read Letter from Concerned Citizen on Personal Income Tax