Establishment of an Independent Body for Equitable Resource Allocation between St. Kitts and Nevis

The government of St. Kitts and Nevis is embarking on a significant initiative to establish a fair share agreement between the two islands, aiming to ensure equitable distribution of revenue and foster a stronger, more transparent relationship within the Federation. This initiative is particularly crucial given the complexities introduced by non-taxable revenue streams, such as the Citizenship by Investment (CBI) program, which have highlighted the need for a more comprehensive and robust framework beyond the existing constitutional provisions for taxable revenue sharing. The government is committed to a process that prioritizes fairness, collaboration, and long-term sustainability, ensuring that both St. Kitts and Nevis benefit equitably from the Federation’s economic progress.

Central to this endeavor is the engagement of an independent body under the auspices of the World Bank. This strategic decision underscores the government’s commitment to impartiality and adherence to international best practices. The World Bank’s expertise will provide the necessary objectivity and credibility to the process, ensuring that the resulting agreement reflects the best interests of all citizens and establishes a sustainable framework for future generations. This independent assessment will analyze the current revenue distribution mechanisms, considering both taxable and non-taxable sources, and recommend a fair and equitable model that addresses the unique economic realities of both islands.

The issue of revenue sharing, particularly regarding the CBI program, has become increasingly important in recent years. The CBI program, which offers citizenship to foreign investors in exchange for contributions to the nation’s development fund, has generated substantial revenue for the Federation. However, the absence of a clear framework for distributing these non-taxable funds has created ambiguity and potential for contention. The new fair share agreement seeks to address this directly, providing a transparent and equitable mechanism for distributing CBI revenues and other non-taxable income streams, ensuring both islands benefit proportionally.

While the development of the fair share agreement is underway, the federal government continues to provide significant financial support to Nevis. This support encompasses a range of essential services, including national security, ports and airports infrastructure, fire services, and direct budgetary contributions. This ongoing commitment underscores the federal government’s dedication to the well-being of Nevis and its citizens, even as the new agreement is being formulated. This continued support demonstrates a commitment to maintaining essential services and ensuring the economic stability of Nevis while the long-term revenue sharing mechanisms are being finalized.

Prime Minister Hon. Dr. Terrance Drew has emphasized the importance of this initiative, highlighting the government’s commitment to transparency and good governance. He has called for patience and understanding from citizens as the process unfolds, recognizing the complexity of the issue and the need for a comprehensive and sustainable solution. The involvement of the World Bank signals the government’s dedication to a rigorous and impartial process, ensuring the final agreement is robust, equitable, and stands the test of time. This commitment to a fair and transparent process aims to build trust and strengthen the bond between the two islands.

The establishment of a fair share agreement represents a crucial step towards strengthening the Federation of St. Kitts and Nevis. By addressing the complexities of revenue distribution, particularly in light of new non-taxable revenue sources, the government is laying the foundation for a more equitable and sustainable future. The engagement of the World Bank ensures that the process adheres to the highest international standards of fairness and transparency, fostering a stronger, more unified Federation for generations to come. This initiative demonstrates the government’s commitment to not only addressing current economic challenges but also to building a stronger, more resilient future for both St. Kitts and Nevis.