BASSETERRE, St. Kitts – DISCUSSIONS regarding the introduction of a Value Added Tax (VAT) have not died down, and recent statements made Prime Minister Hon. Dr. Denzil Douglas have confirmed that arrangements are in place to implement the new tax.
In his prime ministerial press conference yesterday (Aug. 26), Douglas revealed that there has been much progress made in preparation to implement VAT. He stated that his government has already “set up the system” and has prepared an office space for the management of VAT.
Early discussions surrounding the consumption tax raised a number of concerns among consumers, as many saw its introduction as a burdensome addition to the list of taxes already existing.
Once implemented, the tax would be charged as a percentage of the price of goods and services bought.
Although there have been no education drives to sensitise the public as yet, PM Douglas informed that officers have been identified, adding that they are “working full time to ensure that the entire corporate community and the citizens of this country understand exactly what the VAT is [and] what it means”.
Douglas attempted to allay public worry by stressing that people must be educated about VAT before it is implemented. He asserted that the notion the VAT will be an additional burden to the people is “false”, and pledged a personal promise to consumers that the new tax would ease some already-existing tax loads.
“I put my political career on the line by saying it will not be a burden. In fact, it will lighten the burden of taxpaying that we have in the country at this moment because it is something that will help rather than burden,” he stated.
VAT was recently recognized by the International Monetary Fund (IMF) as one of the key revenue reforms to “minimize fiscal slippages” in Eastern Caribbean Currency Union countries with very high public debt levels.
He said that although he is confident the consumption tax would replace a number of “cumbersome and difficult” taxes, the government has been very careful in insisting that there is no specific deadline to meet for implementation.
“We also have some difficult situations that need to be tackled first between St. Kitts and Nevis because the authorities are in fact recommending that there be one common jurisdiction in terms of the implementation of this,” Douglas informed. “Of course, Nevis in a way collects its own taxes, and if you’re going to have the VAT collected and shared between the two entities we must look at how best to have this done.”
Details of the implementation and implications of the new tax remain unclear at this point, but it is expected to be established only after public education is completed.
