PM Anthony. Photo credit: Antigua Observer
No new taxes will be imposed when the government presents the 2014/2015 national budget, but there will be some adjustments to the existing duties.
That’s according to Prime Minister Dr. Kenny Anthony who said these variations will be made with a view to moving the country out of the “distressing period that we’ve all experienced”.
Speaking on HTS Newsforce, Dr. Anthony said these modifications come as the Value Added Tax (VAT), which was implemented here on October 1, 2012, is now stabilising.
“I do not believe that we should introduce any new taxes at this time. Whatever changes will occur are changes within the existing range of policies. In other words, there will be adjustments of a varying kinds but I don’t think that the right way to go is to go by way of introducing new taxation,” he said.
He indicated that some items on the VAT exempt list may be removed while others could be added. This review comes as the private sector continues to make calls for a review of VAT on certain goods and services.
“There are some items really that ought never to have been on the exempted list, for example cauliflower, broccoli and those things. [They are] health foods but what they are doing on the exempt list is very questionable. So in essence we will have to move in the direction of reducing expenditure but at the same time I think because VAT is now stabilising we’re getting a clearer sense of how it is working we will be in a position to make some adjustments in respect of some taxes as we begin to shape the future of the country and move away from this very distressing period that we have all experienced,” he stated.
Many of the measures to be implemented will be intended to further reduce the country’s fiscal deficit, which has gone from 9.6 percent to 6.3 percent.
Saint Lucia was the last member of CARICOM to adopt VAT.
Starting last week, certain tourism service providers were asked to pay Value Added Tax (VAT) on select services, which were initially exempt from that tax.
According to a VAT (Rate of Tax) amendment order issued by the prime minister in March, a 10 percent VAT rate was imposed on some of these previously exempt services. These include accommodation services by hotels and their supply of food and beverages; tours, excursions and rides with local aerial trams and zip lines; hair braiding and massages also fall under that scope.
This came into effect from April 1, 2014.