BASSETERRE, St. Kitts – WITH only six months left for public consultation on the introduction of a Value Added Tax (VAT) in the Federation, discussions with the private sector have been minimal and the necessary White Paper is yet to be launched.
Consultations with the private sector and general public were to begin from April 1, according to the VAT timeline set out by Prime Minister and Minister of Finance Hon. Dr. Denzil Douglas.
Executive Manager at the St. Kitts and Nevis Hotel and Tourism Association Michael Head said the delay in the publication and circulation of the White Paper has caused a “disappointing” slowdown in the consultation process. He asserted that more time would be necessary to complete widespread consultations.
“Obviously this would delay the consultations. It is disappointing that the White Paper isn’t out yet. This should have been available since April 1. We understand it is in committee stage, but we need to see the White Paper as soon as possible to discuss it, comment on it and to make sure that all is well with the hotel and tourism industry.
“I would hope they extend the time,” he added.
In a recent interview with SKNVibes, HTA President Nick Menon indicated that discussions with the Tax Reform Office in the Inland Revenue Department were very limited, as specific details were minimal on how VAT would be implemented. He noted that while the HTA members were able to express some of their concerns, they were left with “more questions than answers”.
Since the Prime Minister’s March 23 announcement on VAT, the St. Kitts and Nevis Chamber of Industry and Commerce established a committee to research all matters incidental and related to VAT in order to give its membership a better idea of how the new consumption tax will affect them.
Committee Head Scott Caines told SKNVibes that the delayed White Paper makes it “difficult” to proceed and encourage meaningful consultation. He argued that the government’s approach to the introduction of VAT is “backward” and does not allow businesses to give as much input as would be required.
“The White Paper is very important, as it gives an outline how the tax would work. The Chamber’s position is that even before the White Paper there should have been consultations and the White Paper would come after, which would lead to the legislation being passed. The Chamber is of the view that the process is backward because there should have been consultations long before.
“At this point in time, they are not getting an appropriate input. The government is explaining what they are going to do rather than allowing [businesses] to give input,” he said.
Caines added that the November 1 deadline for VAT introduction would neither be enough time for businesses to make changes to their own internal systems nor for the government to make “such large changes” in its tax system.
He informed that the CIC is currently gathering information and will hire a consultant to give its membership a more informed view of how they can be affected by the new tax.
Efforts to contact an official from the Tax Reform Office were unsuccessful. However, SKNVibes understands that the White Paper is in its final revision and is set to be launched by the end of this week. The document contains an overview of the VAT law, details on the taxation rate and goods to be exempted.
