The Government of Saint Lucia will seek the consensus of Parliament on Tuesday to waive VAT on building materials included in the Construction Stimulus Package, which officially ends on February 28, 2014.
Cabinet met Monday to discuss an extension of the programme, which was initially planned to expire on February 11, 2014.
According to a statement from the Government Press Secretary, the date for the end of the programme on February 28, coincides with the end of the exemption granted by CARICOM for Saint Lucia to waive duties on the building materials which were included in the programme.
The statement goes on to say that while the full impact of the programme is yet to be evaluated, it is estimated that the Government of Saint Lucia will forego revenue of $43.7 million and a further $12.6 million to cover the mortgage subsidy on the programme. This will bring the total cost of the Construction Stimulus Package to $56.3 million. The total revenue lost comprises custom duties in the amount of $40.3 million and refunds to importers of $2.7 million.
It is further estimated that individuals with mortgages of $180,000.00 will save approximately $47,300 in interest payments while those with mortgages of $350,000.00 can save as much as $93,000.
While data is not available from all participating banks, information from the Bank of Saint Lucia indicates that at the end of December 31, 2013, the bank approved loans totaling $42.6 million of which $30.7 million were for residential purposes.
The Consumer Affairs Unit of the Ministry of Commerce is expected to give guidance to consumers on what price movements to reasonably expect after the package has ended.