Lindsay Grant says “Our people will be forced to live under stringent and demanding economic conditions as a result of this proposed VAT"
Basseterre, St. Kitts, July 15th 2010 (PAM Secretariat Press Release) - With just over 3 months before implementation, Prime Minister Dr. Denzil Douglas finally revealed a massive rate of 17 percent for the proposed Value Added Tax (VAT), which is the highest VAT rate in the entire OECS.
After an election campaign and manifesto that made absolutely no mention of VAT, the ruling Labour Party administration announced in March that VAT would be implemented by November 1st 2010.
Yet with barely 8 months to prepare, private sector stakeholders including the St. Kitts and Nevis Hotel and Tourism Association (HTA), warned about the impending woes that VAT would cause to the industry.
The Government however refused even to delay the proposed VAT introduction from November 2010 to April 2011, after the upcoming tourist season.
The People’s Action Movement has indicated that the introduction of the VAT will increase the cost of living in the country, a situation that will be unbearable to ordinary citizens. “It is unconscionable for this Government to at this time introduce a 17% VAT rate, the highest in the OECS” said PAM Leader Lindsay Grant.
Grant noted, “A 2010 report on Guyana from the Statistical Bureau provides the perfect example of how VAT introduction on prices for very basic vegetables, fruits and cereal products saw increases ranging from 10.8- 20.6%. As a result there was a significant spike in cost of living in that country.”
Grant continued, “We are saying that absolutely no tax should be placed on food items especially when one considers that our country imports 75% of its food.
The PAM Leader concluded: “With just 8 months, our people will be forced to live under stringent economic conditions due to this proposed 17% VAT, the highest VAT rate in the entire OECS region.”
In neighboring islands, VAT implementation has taken as long as 3 years of consultation, preparation and education. Due to the high-handed manner of the Labour Government, however, St. Kitts-Nevis must brace for the highest VAT rate in the OECS in just 8 months. The proposed 17% VAT rate will make St. Kitts-Nevis second only to Jamaica at 17.5%.
