Dominica will introduce a 10% flat income tax from January 2027, replacing the current three-tier system while maintaining the EC$30,000 tax-free allowance.
Dominica: The Government of Dominica has announced that it will replace the existing three-tiered tax structure and introduce a flat income tax rate of 10 per cent, describing it as the most significant income tax relief in history to be granted to the people of Dominica.
This announcement was made by the Minister for Finance, Economic Development, Climate Resilience and Social Security, Dr. Irving McIntyre, during his presentation of the 2026/2027 National Budget of EC$1,125,225,495 under the theme: "Protecting Our Progress, Strengthening Our Independence, and Securing Our Future." The presentation of the National Budget took place in the House of Assembly on Tuesday, August 4, 2026.
In his address, Minister Irving McIntyre shared that the current 15 percent, 25 percent and 35 percent personal income tax rates will be abolished at the end of 2026, with the new system set to take effect on January 1, 2027. He noted that Government will still maintain the existing personal tax-free allowance of $30,000 under the new tax regime.
The 10 per cent tax rate will enable the citizens of Dominica to retain more of their earning, therefore reducing the financial burden on them.
The Minister of Finance provided a few examples of how the system will increase the worker’s take home, sharing that a worker earning an annual income of EC$48,000 will retain EC$900 more per year (about EC$75/month) and one who earns EC$84,000 per year, will gain an additional EC$6,500 (about EC$542/month).
This is a sacrifice the Government is making to support the working people in our country. It is the most significant income tax relief ever granted to the people of Dominica. It will deliver meaningful savings to workers and make our tax system simpler and fairer, explained Dr. Irving McIntyre.
He further reaffirmed the Government’s continued commitment to its people, stating, “All these measures, those in the past and the flat rate today, demonstrate how throughout the tenure of this Government we have been reducing the income tax burden on individuals, allowing them to keep more of their pay to invest and improve the lives of their families.”
The Government of Dominica also announced another major change to foreign income taxation, sharing that from January 1, 2026, both residents and non-residents will not be taxed on worldwide income. It noted that taxing income earned domestically will encourage more retired citizens, remote workers and investors to settle in the island.