BASSETERRE, St. Kitts - PRESIDENT of the St. Kitts and Nevis Chamber of Industry and Commerce (CIC) Damion Hobson has called on the government to increase the number of food and medicine items that fall within the zero-rated or exempt groups under the Value Added Tax (VAT) regime.
Speaking at the opening ceremony of the 2014 National Consultation on the Economy on Thursday (Oct. 2), Hobson stated the he believes the removal of VAT on these items would greatly assist the poor and those suffering from chronic diseases.
“Again we call for the reduction in VAT on financial services, to reduce the cost of borrowing and to incentivize banks to drop lending rates. One final note on VAT is our call for the increase in the number of food and medical items that should be added to the basket of goods enjoying either zero rated or exempt status. This helps us to cater more to the needs of the poor and those suffering from chronic diseases.”
Hobson proposed that the government adds a third VAT-free day this year and was open to discussion on the matter.
“There was no more glaring manifestation of this than in 2013 during the VAT Days. A reduction in the Value Added Tax delivered greater levels of revenue to government, in 48 hours, compared to weeks or months, in some categories.
“This year, buoyed by the obvious success of last year, we recommend that this initiative be repeated, except that we are proposing three days instead of two; with good reason. We are prepared to jointly examine the rationale at your convenience. But I should suggest now that this formula is a “win-win” for all three stakeholder groups - government, consumers and businesses that qualify.”
He also highlighted some benefits of the VAT-free days.
“But the greatest benefit is that it keeps the spending here at home rather than providing injections to trade and commerce overseas. This also helps in the retention of jobs. There is a saying, ‘when the private sector does well, there is increased revenue for the public sector and of course when the private sector is hurting, so too will the revenue streams of the government.”
Hobson also reminded that the private sector was critical in molding the economy of the Federation.
“A healthy private sector also results in stronger communities and greater opportunities for the personal growth and movement of the people to higher levels of social prosperity.
“But to begin with, the private sector must have an environment in which to blossom.”
