Government talks VAT
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Government talks VAT
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Contact: Shannon Lebourne
11 April 2012 –Protecting the poor and most vulnerable is government`s primary focus as it moves to implement the Value Added Tax (VAT) on September 1 this year.
In addition to not imposing the tax on essential food items consumed daily by ordinary citizens, government will also broaden its various social programmes to cushion the impact of the tax on the indigent.
Prime Minister and Minister for Finance Honourable Dr Kenny Anthony says government is cognizant of the need to protect vulnerable citizens who are already reeling from the effects of global economic stagnation.
“The big issue for government is to protect the poor and vulnerable particularly at this time as we are going through a period of economic difficulty, economic crisis and economic adjustment and we have to appreciate and understand that we have a high level of unemployment of 24% which we must address. With regards to VAT, we will maintain the policy of zero rated items meaning that we are going to have a basket of goods that we will not charge VAT on, of course there will be differences between us and the former government on the contents of the basket but we both agree that this is the right way to go so we will maintain that and government will not impose VAT on water and electricity at this time,” Dr. Anthony said.
The Prime Minister also explained that the pending implementation of VAT is in keeping with various commitments given to international institutions and governments.
Dr Anthony says Saint Lucia would have been subject to a legal challenge by at least one foreign government if the decision was not taken to implement VAT and do away with the Environmental Levy at the soonest.
The Prime Minister said, “since the Environmental Levy is a tax on goods coming into the country it meant that our manufacturers who paid a Consumption Tax on goods produced locally were not required to pay an environmental levy since they produced for the domestic market. So the arguments of governments like Trinidad and Tobago is that the Environmental Levy is discriminatory in the sense that it imposes a burden on them but not our local manufacturers and therefore it constitutes unlawful and discriminatory competition. Of course they threatened to take us before the Caribbean Court of Justice (CCJ) and we have explained that the Environmental Levy is one of those taxes that will be absorbed by VAT”.
Saint Lucia is the only country in the six member OECS which has not yet implemented the Value Added Tax (VAT).
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