BASSETERRE, St. Kitts - THERE will be one VAT Day this year, as was announced by Prime Minister and Minister of Finance Dr. the Hon. Timothy Harris at the recently-held National Consultation on the Economy.
Introduced a number of years ago by the former Labour Administration, a VAT Day is a day when the 17% Value Added Tax is significantly reduced. This incentive resulted in significantly increased spending on those days and accounted for notable decreases in overseas purchases.
Traditionally, there have been two VAT Days per year, both of which have fallen in December.
Prior to Dr. Harris making the announcement at the National Consultation on the Economy held on Thursday (Oct. 22), President of the St. Kitts and Nevis Chamber of Industry and Commerce Damion Hobson made a pitch for 2015 VAT Days and explained his reasons for this suggestion.
“This initiative has produced remarkable results for consumers, local businesses and the Government. The increased sales have led to much higher revenues in the short term of the application of the rebate. Given past trends, a number of companies have already invested substantially in new inventory in anticipation of the VAT Days this coming December. For instance, some auto sales companies have had to place orders four months in advance to meet December arrival deadlines.
“We, the private sector and the many families throughout the country, are now looking to this new Government to continue the flow of greater economic activity that the country sees during the Vat Days. I urge the Prime Minister and Minister of Finance to carefully consider what I have just shared and to announce this morning, the VAT Days for this December.”
In making the announcement, Dr. Harris stressed that for 2015 the Government had already delivered more than $100M in private sector tax concessions.
“This is a significant contribution which the Government has made and we therefore have to be careful because this has been a source of engagement with the IMF….
“We say that for this year the Cabinet has determined in the context of the recalibration which we must do in the context of renewed fiscal discipline, in the context of the reality that already for this year we have provided 100 million dollars of concessions that we will have only one VAT Day on a day to be determined between the Chamber and the Ministry of Finance on Monday.”
Should there be a change in the VAT Day policy, as the CIC’s President advised, at least one year’s notice should be given.
“…If in the future there is to be a change to this policy, it is recommended that at least one year’s advance notice be given. I believe the Prime Minister agrees with the request for advance and early notice. It was only in September this year, at a dinner meeting with the Deputy Managing Director for the IMF, that the Prime Minister stated that he too believes that advance notice should always be given before these Vat Days.”
