VAT reduced in St Lucia
CASTRIES – The St Lucia government has hinted at a further reduction in the Value Added Tax (VAT) as it moves to grant emergency relief to nationals as a result of an ailing economy.
Prime Minister Allen Chastanet, speaking to reporters Tuesday, less than 24 hours after announcing a 2.5 per cent decrease in the VAT, said that another announcement of a possible further adjustment was likely as early as the first quarter of 2017, adding the announcement made during his radio and television broadcast earlier was just the beginning.
The tax will be reduced from 15 to 12.5 per cent from February next year and Chastanet said it would result in EC$52 million (One EC dollar =US$0.37 cents) “coming back into the economy
“We are actually doing a complete review, we are putting together a model on different options that we have and early in the New Year I will announce a further amendment to the VAT bill,” Chastanet explained.
Piloting the VAT motion in Parliament on Tuesday, the Prime Minister said VAT was a difficult tax for this part of the world, even as he acknowledged its effectiveness.
He quoted extensively from a report by the Barbados-based Caribbean Development Bank (CDB) on the economic situation here which he said along with other agencies guided the government in its decision to reduce the tax.
“We took time to review the current VAT system. We commissioned a study by Ernst and Young and they undertook a comprehensive review of the VAT. Combined with the CDB (Caribbean Development Bank) report and our discussions with various financial agencies such as the ECCB (Eastern Caribbean Central Bank) and IMF (International Monetary Fund) we received several recommendations on reforming the VAT system,” the Prime Minister said.
“We are taking all those things into consideration to move forward,” Chastanet said. (CMC)