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Increased taxation on Barbadian goods in effect as St. Lucia remains firm

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Minister Hippolyte

The imposition of a 70-per cent taxation on Barbadian goods entering these shores took effective yesterday, May, 1, 2014, and despite the uproar from Barbados, the St. Lucian government remains firm in its decision.

In a brief interview with St. Lucia News Online today, Permanent Secretary in the Commerce Ministry Titus Preville noted that the Caribbean Community (CARICOM) will guide the process as it relates to Barbados’ disapproval with this move.

And speaking to the media recently, Commerce Minister Emma Hippolyte echoed similar sentiments, saying the move is not intended to cause a war with Barbados but to ensure that Saint Lucia takes advantage of the opportunity provided in the laws governing the trade agreement among CARICOM member states. She said this move will also help the island receive more revenue.

Hippolyte further explained that there is no breach in the CARICOM trade agreement between the two countries and the move to increase taxes is within the island’s legal right.

The minister emphasised that the move is made within the guidelines set out in the Treaty of Chaguaramus, which states that countries could adjust rates of duties in items upwards. Hippolyte added that Saint Lucia, which is a member of CARICOM, could take advantage of provisions to increase taxation.

However, the Barbadian government has said it will use the upcoming Council of Trade and Economic Development (COTED) meeting scheduled for May 6-10 in Guyana to iron out this issue and bring to the fore why the Barbadian government feels that the increased taxation should not be imposed.

A large contingent from Barbados is expected to attend this meeting, but the Barbadian government has since sought to meet with its Saint Lucian counterparts before the COTED meeting. There is no information whether these meetings came through and whether the two countries have agreed on something else.

Under article 164, Lesser Developed Countries (LDCs) are allowed to suspend as a “temporary measure” preferential treatment usually granted to products of other CARICOM member states in order to promote the development of a specific sensitive industry in the LDCs.

The implementation of the regime means higher duties for a specific list of goods being imported from ‘More Developed Countries’ within CARICOM. Already, officials at the Banks Holding Lltd out of Barbados are said to be complaining about the negative impact the tax will have on malt and beer products.

The duty rates provide a measure of protection for specific goods from the LCD’s. The regime in keeping with the CARICOM agreement will span five years from May 1, 2014 to December 31, 2018.


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