BASSETERRE, St. Kitts – IN response to private sector concerns over the November 1 deadline for the introduction of a Value Added Tax (VAT), Prime Minister and Minister of Finance Hon. Dr. Denzil Douglas has urged businesses to use their “education and understanding” to meet the “critical” deadline.
“We are aware that some persons and entities will be concerned about the time factor because this has been mooted. However, we are all aware that whatever time frame was given, there will be someone somewhere who would always ask for more time. We therefore need to make every effort to work within the timeframe that we have available to us.
“My government considers this move toward the VAT to be very critical at this stage of our development and would not wish to delay the implementation of this critically important piece of tax legislation,” Douglas said in addressing a full room of business stakeholders at last week’s consultation on VAT.
When PM Douglas made the March 23 announcement of the proposed VAT timeline, with November 1 set as the date for the new tax to come on stream, a number of businesses represented by the local Chamber of Industry and Commerce and Hotel and Tourism Association were concerned that the period would not allow for a seamless introduction of the tax. Many raised concerns of the insufficient time for widespread consultation, broad-based education and for businesses to adjust their systems to the new tax regime.
Douglas, however, said that businesses must do all in their power, with assistance from the government, to ensure that they make the deadline.
“I would like to solicit your cooperation in getting your businesses up and ready to introduce the VAT by November 1, 2010. We are prepared to provide you with as much assistance as is feasible to ensure that this deadline is accomplished. We are highly educated people; let us now depend on our level of education and understanding to move forward together,” Douglas stressed.
According to the VAT master plan set out by PM Douglas, a major education and public awareness programme on VAT would begin in April before the passage of all necessary legislation for the new tax in May. A delay in the launch of the White Paper, however, caused a slight delay in the consultation process, and draft VAT legislation is expected to be prepared by the end of this month.
Douglas added much importance to the consultations with the stakeholders, particularly the business sector, as he noted that their input is vital to the successful introduction of VAT.
“Since it is generally accepted that two heads are better than one, we would like to engender discussion on all of these issues, so that in the end the final format of the VAT would have benefited from the views of a wide cross-section of our citizens,” he added.
A number of policy and administrative decisions are still to be made through consultation. These include the rate of taxation, exempt and zero-rated supplies and the format of the certificate to be issued to every VAT registrant.
The upcoming weeks will prove instructive in the overall VAT process as consultations are expected to climax in time for the May draft legislation. Thereafter, widespread education and public awareness will roll out so that every consumer can be familiarized with the new tax and how it may affect them.
