Government provides explanation for cell phone tax hike

Friday, May 7, 2010 – Government’s Press Secretary Mr Darnley Lebourne is seeking to explain the rational behind government’s decision to increase the tax on the use of cellular phones, from the current rate of 10 percent to 15 percent which took effect from Wednesday, May 5, 2010.

Mr Lebourne says the increase was carefully considered by government and will not adversely affect the most vulnerable.

“Government is mindful of the impact that taxes will have on people. Prime minister Honourable Stephenson King has said that there will not be any new taxes in the budget that was just presented and what we are seeing is an expression of an existing cell phone tax from a ten percent charge to a fifteen percent. What this means is for the purchase of a ten-dollar phone card whereas there would have been a charge of $1 that charge will now increase to $1.50.”

The press secretary says the funds raised from the increased cell phone tax will be re-injected into the local economy.

He says the funds will be used to finance various social and infrastructural development programmes.

“We're talking about projected works with respect to infrastructural development that would help improve the quality of life for taxpayers and all Saint Lucians. This will involve investments in road developments, the education system, healthcare and other major infrastructural developments that government wants to undertake. I think what we should look forward to is the benefits down the road in terms of how the money raised from the tax will be reinvested to stimulate economic activity within the country.”

Mr Lebourne says the cell phone tax is not new but rather an increase in a tax regime which was implemented in 2002.

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