BASSETERRE, St. Kitts – GOODS and services providers from across the Federation, including hoteliers, restaurateurs, wholesalers, retailers and entrepreneurs, were able to engage officials from the Tax Reform Unit yesterday (May 6) as national consultations on the introduction of a Value Added Tax (VAT) pick up pace.
The stakeholder’s consultation, held at the St. Kitts Marriott, attracted a wide cross-section of business representatives as well as public sector officials and tax experts who identified their concerns with the White Paper, the guiding policy paper for the introduction of VAT.
As it stands, the White Paper outlines the government’s approach to the new consumption tax regarding, among other things, VAT certification of registration, a list of possible taxable, zero-rated and exempt supplies, accounting and records and penalties.
The recently-issued 27-page document also addresses the proposed treatment of selected sectors, issues relating to public consultation and education and registration and training. This document, according to Prime Minister and Minister of Finance Hon. Dr. Denzil Douglas, is expected to guide the national discourse as the government implements a “simpler and more efficient tax”.
“One of the main benefits which will be derived from the VAT is a wider tax base.... VAT will also consolidate and modernize our tax system. I am sure that we would all agree that a multiplicity of taxes at different rates is inefficient and uneconomical to administer,” Douglas said in his featured address at the consultations.
Douglas noted that the nation will be guided by the experiences of VAT in over 150 countries, stressing that the likelihood of making serious policy mistakes would be significantly reduced.
“Having several alternative VAT laws and experiences to start from makes it easier to devise a system to suit our particular circumstances. In addition, there is clear evidence that the VAT in many countries is generating buoyant revenues and therefore this is a very desirable feature of the tax for us here in St. Kitts and Nevis,” he added.
Representatives from the St. Kitts and Nevis Chamber of Industry and Commerce, the St. Kitts and Nevis Hotel and Tourism Association, the Organization of American States and various businesses raised concerns about parts of the White Paper, seeking clarification and making recommendations to mould the VAT legislation.
Participants also made enquiries on the special treatment for sectors, provisions for non-compliance and the definition of a number of terms used in the policy document. Issues of export, domestic transportation, the banking sector and zero-rated supplies also surfaced during the two and a half hour-long meeting.
Tax Reform officials noted the queries and in some cases requested for written recommendations to be made ahead of the draft legislation, which is expected to be ready by the end of this month.
Programme Coodinator of the Caribbean Regional Technical Assistance Centre (CARTAC) Therese Turner-Jones, made brief remarks at yesterday’s consultation, calling yesterday a “very important day in the history of the Federation of St. Kitts and Nevis”. She congratulated the government and its partners for taking the VAT route and said it was a fitting move on the path to regional integration.
“The purpose of the VAT in St. Kitts is not just to modernize the tax system, but also to bring St. Kitts more in line with other countries in the region and CARICOM members. It goes a long way in meeting the requirements of the CSME. It’s also consistent with trade liberalization that’s ongoing in the region and so this is a really important event,” Turner-Jones noted.
Similar consultative activities are on schedule for the Tax Reform Unit and these are expected to reach major private sector groupings down to every consumer. More information about VAT and its introduction can be accessed via http://www.sknvat.com/.
