December 31st, 2024 -- The Government of St. Kitts and Nevis is steadfast in its commitment to enhancing the economic well-being of its citizens. As declared by the Honorable Prime Minister, Dr. Terrance Drew, during his 2025 Budget Address, a significant VAT reduction will be implemented starting January 1, 2025., lowering the standard VAT rate from 17% to 13% for the first six months of the year. This new rate will apply to the supply or sales of goods and services across the Federation that previously sold at the 17% standard rate. This VAT Relief Holiday is designed to empower families and businesses by reducing financial burdens and fostering economic stability.
To provide clarity, it is important to note that any transactions occurring before January 1, 2025, will be subject to the previous rate of 17%. According to the VAT Cap.18.47, the applicable VAT rate is determined based on the earliest of the following:
• The date the goods are delivered or made available, or when services are completed.
• The date an invoice for the supply is issued by the supplier.
• The date any consideration for the supply is received.
The 10% Reduced Rate for Commercial Rentals, Accommodation Services and Value of Supplies by a Restaurant as per Section 27 (1) (d) of the VAT Act Cap.18.47 will continue to apply.
To ensure the intended benefits of this reduction are realized, the Government will enforce strict monitoring measures to prevent price gouging and other unfair practices. These efforts will be supported by the recently enacted Consumer Protection Act and other applicable legislation.
We encourage everyone to reach out with questions or for further clarification on the new VAT rate as we move towards a prosperous 2025. Please feel free to reach out to us via the telephone or e-mail contact information outlined below and we will guide you through each step to ensure a smooth process.
Thank you for your cooperation and supporting our community’s growth and development.
The Inland Revenue Department, Building our Nation Through Responsible Tax Administration
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