South America and South Atlantic Islands

Ascension Island (British Overseas Territory)
Last reviewed: 28 July 2009

Country information

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ECONOMY

Prior to April 2002, in the absence of a conventional government with revenue raising powers, public and common services were funded and provided by the Users and the military, who each contributed an agreed sum annually.

A fiscal and economic report on Ascension Island, conducted in March 2000, recommended that future revenue for the Ascension Island Government should be raised through the introduction of taxation. As a result of this, and in close collaboration with the Users and the military, a concept paper was produced which determined that the Ascension Island Government would take over responsibility for those public services normally provided by a government. Those commercial services not appropriate to government operation moved to private operators.

The introduction of the new fiscal regime took place in April 2002. Revenue is now raised from Personal Income Tax, Property Tax, Import Duties and a small amount of local revenue such as philatelic sales. Prior to the finalisation of the tax framework the Ascension Island Government had lengthy and detailed negotiations with the commercial organisations and the military to ensure that no individual suffered a reduction in their take-home (net) pay. Property Tax is paid by public and commercial organisations, and Import Duty is limited to covering only tobacco products, alcohol and fuel. Import Duty is therefore an indirect tax and its impact on the individual is determined by their purchasing preferences.

Ascension aims to have and has had a balanced fiscal budget, with small reserves for several years. The total Revenue budget (Consolidated Fund) for 2008/09 is £6.17m. Government expenditure funds public services including a school, a hospital (offering limited services but with basic surgical capability), police and judicial services which are available without charge to Ascension Island tax payers.

Ascension has a small private sector. The former government owned Georgetown shop is now owned and managed in the private sector by Solomons. The former Guest House now operates successfully as the Obsidian Hotel and there are several other small retail units and sport fishing operators.