BASSETERRE, St. Kitts - RESIDENTS of the twin-island Federation of the St. Kitts and Nevis would be in for a treat Thursday (Dec. 5) and December 19, as those days will see a reduction of the Value Added Tax (VAT).
The announcement of the reduced VAT days was made by Minister of Information Sen. the Hon. Nigel Carty on Friday (Nov. 29).
According to a release issued by the Prime Minister's Press Secretary, Erasmus Williams, Minister Carty said that Cabinet has approved a VAT reduction of 12 percent, which means that VAT would be at only five percent on December 5 and 19.
Minister Carty specified that VAT would be reduced on goods only, and “there will be no discounted VAT on guns and ammunition, alcohol, vehicles and cigarettes. There will be no discounted VAT on the sale of services such as legal fees, tickets for lottery and raffles, top-ups and phone cards, etc.".
The Information Minister stated that those entrepreneurs whose taxes are not up to par would not be permitted to participate in the discounted VAT days.
Minister Carty also stated that since the introduction of VAT in 2010, the government has sought to provide incentives to assist consumers and businesses with the reduction of the tax two days in the month of December.
“The discounted VAT days provide an opportunity as we near Christmas and the festive season for consumers of all strata of our society to purchase a range of goods at hugely discounted rates on the Value-Added Tax. This, we believe will provide an opportunity for citizens and residents to make their usual extraordinary provisions for the Christmas and Carnival-related activities,” Carty stated.
The public wasted no time in taking advantage of the reduced VAT days since its inception in 2011 when the tax was reduced to seven percent on December 22. All participating stores were filled to capacity as the people flocked to stock up on goods at the discounted prices.
The reduction came following Cabinet’s approval of “an EC$1 500 allowance on imports during December and the permanent removal of the seven-day stay overseas to benefit from the EC$400 allowance”.
This decision did not sit well with the Chamber of Industry and Commerce (CIC), which felt that rather than encouraging customers to shop locally, the government was encouraging them to shop overseas, which would have a negative impact on local businesses.
Since then, as the month of December approaches, the public keeps its ear to the ground for the annual announcement which would state what the reduction would be and on what days. Last year (2012) the VAT was reduced to five percent and an extra day was tacked on to the package.
Minister Carty said that over the two years, over 100 businesses took part in the annual extravaganza and had reported millions in sales.
“Over the preceding years, an average of 108 local businesses have taken part in the discounted VAT day and have benefited greatly from the increased consumer activity as average daily sales of EC$13 million have been registered,” the release quoted Carty as saying.
Minister Carty also stated that this measure is applied to both St. Kitts and Nevis as well as both local purchases and imports.
