The Dominican Government has unveiled a EC$1.24 billion fiscal package for 2026/27, including the country’s largest income tax reduction, new incentives for businesses and major investments in infrastructure and public services.

Presenting the budget under the theme “Protecting Our Progress. Strengthening Our Independence. Securing Our Future,” Finance Minister Dr Irving McIntyre announced that the government will replace the current personal income tax structure with a single 10 percent rate from January 1, 2027.

The new system will replace existing tax bands of 15 percent, 25 percent and 35 percent, while maintaining the EC$30,000 tax-free threshold.

McIntyre said the reform represents the most significant income tax relief granted to Dominicans, allowing workers to retain more of their earnings.

Under the changes, a person earning EC$48,000 annually will save about EC$900 per year, while someone earning EC$60,000 will save approximately EC$2,500. A worker earning EC$84,000 will retain about EC$6,500 more annually.

The government will also remove income tax on worldwide income, meaning residents and non-residents will only be taxed on income earned in Dominica.

McIntyre said the move is aimed at attracting retirees, remote workers and investors by making Dominica a more attractive place to live and conduct business.

Business incentives

The budget includes several measures designed to encourage investment and job creation.

Owners of qualifying new commercial rental buildings will be allowed an annual capital allowance of up to EC$30,000 for a period of 10 years.

A new Business Vulnerability Fund deduction will allow companies to receive tax deductions on approved disaster resilience funds, encouraging businesses to prepare financially for climate-related shocks.

The government will also reintroduce an employment tax rebate from October 2026 for two years. Businesses creating qualifying new jobs will be able to reduce their annual tax liability by up to EC$10,000.

Lower import costs

The government is also moving to reduce costs associated with importing goods.

From October 1, 2026, Excise Tax and VAT on imported goods will be calculated only on the cost, insurance and freight (CIF) value, ending the practice of applying taxes on top of other charges and taxes.

McIntyre said the change will simplify customs calculations and reduce costs for businesses and consumers.

The government will also extend VAT exemptions and import duty waivers on selected essential goods until September 30, 2026, as it continues efforts to cushion households from global price pressures.

The finance minister warned importers, wholesalers and retailers that savings from these measures must be passed on to consumers.

Growth and investment

McIntyre said the budget comes as Dominica continues to record economic growth.

The economy expanded by 4.5 percent in 2025, supported by an 18.3 percent increase in visitor arrivals and growth in construction, retail and trade.

The International Monetary Fund is projecting further growth of 3.1 percent in 2026, slightly above projected growth for the global economy and the Eastern Caribbean Currency Union.

A significant portion of spending will support major development projects.

The Office of the Prime Minister received EC$290 million for continued work on the international airport and marina projects, including EC$250 million for the airport and EC$40 million for the marina.

The Ministry of Public Works and the Digital Economy was allocated EC$70.7 million for roads, water, sanitation and digital services, while EC$51.2 million will support the completion of the geothermal and hydro power transmission network.

Other allocations include EC$76.9 million for education, EC$75.4 million for health, EC$67.1 million for national security and legal affairs, EC$57.1 million for environmental programmes and Kalinago development, EC$25.4 million for agriculture, and EC$19.8 million for housing.

McIntyre said the package represents an annual revenue sacrifice of EC$43.5 million as the government chooses to leave more money in the hands of workers, households and businesses.

He said the expectation is that the additional disposable income and incentives will translate into greater investment, job creation and economic activity.