BASSETERRE, St. Kitts – LESS than one week before Value Added Tax (VAT) is officially implemented in St. Kitts Nevis, the Federation’s Chamber of Industry and Commerce (CIC) is calling on the government to delay implementation until the country would have better readied itself for the eventuality.
In March 2010, Prime Minister of the Federation, Dr. the Hon. Denzil L. Douglas informed that VAT will be implemented on November 1, 2010, effectively giving the nation mere months to prepare.
Yesterday (Oct. 25), during a press conference, the CIC explained to the media that although it’s members might be prepared for VAT’s implementation, it is not sure what is must be ready for or what it is expected to do under the VAT regime.
Members of the CIC explained that two of the major problems that have presented themselves are: the absence of transitional arrangements which are to address issues of possible double taxation, and the absence of regulations which would give effect or teeth to the VAT legislation.
The CIC’s VAT Response Project Chairman, Scott Caines, explained: “The important point that we were making (is) that it is difficult for Chamber members to comply to the full extent of the law at this point in time because we don’t know what the full law is. We are ready to some extent as it relates to what we understand. We don’t know if what we understand is the law.”
Chamber President Michael Morton echoed similar sentiments, noting that the CIC members could not comply with the VAT law in the absence of “the requisite legal framework”.
“We are five days before the implementation day. The very fact that we do not have the regulations ought to say to us all…the country is not ready! So basically, we cannot be ready without the requisite legal framework. The legislation has been passed. Yes! But the legislation has regulations which we must use to comply with the laws. And, what is of major concern to us, in speaking with the Tax Reform officials, they have indicated to us, that upon inspection, if any tax payer does not comply with the law, the legislation gives them the power to go back and assess and fine the business for not conforming with the law. Now, how are you going to fine someone when they are not educated (about) the regulations or the law?”
Another concern pointed out by Caines was that all registered businesses are required to mount a government-issued certificate bearing that company’s VAT registration number within the confines of their business. He explained, however, that that certificate, days before the implementation of VAT, is yet to be received.
“Most, if not all businesses, have been registered and the government has issued us with a number, but we don’t have the actual certificate. We were using that as just a small example as to where not only the Chamber might not be able to fulfill all the responsibilities under the legislation at this point in time. But the government on their end, appears to us, as not being able to comply with the law that they are passing to the letter…We need to have the certificate posted in the business to show that we are authorised to collect this tax. We are not aware of any business which would have received that certificate at this time.”
The VAT Response Project Chairman said the CIC, sometime during this week, would be communicating with the government to ask for time to become 100 percent compliant.
“What we are proposing is to ask the government to give us a period to better understand the laws and regulations, because…tomorrow we are going to have other legislation being passed which is supportive to VAT. We are saying that we need some more to be able to administer this thing better, and that there should be some sort of transitional period…over which the regulation et cetera could be explained better and business can get a change to comply properly with the law.
“The Act was passed and if the Act had to be administered in the way it ought to be, I think several persons would be running counter to the law come November 1. So we are saying that we need some period over which we would have to transition into a full 100 percent compliance to the letter of the law.”
