Federation on its way to achieve November 1st VAT date

BASSETERRE, ST. KITTS, OCTOBER 26TH 2010 (CUOPM) – St. Kitts and Nevis Prime Minister Hon. Dr. Denzil L. Douglas says the Cabinet has been appropriately briefed and advised that the Federation is on its way to achieve the date of November 1 for the introduction of the Value Added Tax (VAT).
 
Responding to a caller from Nevis on his radio programme “Ask the Prime Minister,” Dr. Douglas said St. Kitts and Nevis is just one of two countries in the Eastern Caribbean that are members of the Eastern Caribbean Currency Union (ECCU) that has not introduced VAT.
 
He said the introduction would not be without problems.
 
“There will always be teething problems. If we wait for the next 12 months for VAT to be introduced, we will still have teething problems. We believe that these problems that we have attempted to address, are not sufficient to delay the introduction of the Value Added Tax,” said Dr. Douglas, who added that he is one of those “who believe from all the advice that I have been given that the introduction of the VAT  is not going to make things harder for poor people in St. Kitts and Nevis.”
 
“We have introduced it because we believe that VAT is a fairer tax. It is a much more efficiently administered tax. It broadens the base of those who are paying taxes and it will assist to a large extent in putting St. Kitts or Nevis within the family of nations within the currency union that are attempting to have a common economic financial monetary and fiscal policy through the urgings of the Eastern Caribbean Bank (ECCB),” said Prime Minister Douglas..
 
He said that the appropriate analysis has indicated that VAT is going to help the country.
 
Dr. Douglas noted that while VAT is not going to retard the progress and the development of the country.
 
“Yes, we have to be careful with the introduction of VAT at this time when there are so many other challenges economically and financially, but we do not know when the crisis is going to end. That is why our macro-economist have to be very vigilant in ensuring that there is adequate analysis and assessment and reporting so that if there is the possibility that the economy may not move in the direction that we wish it to move with the introduction of the VAT, quick alternative measures can be reverted to,” the Prime Minister told his listeners.
 
Dr. Douglas disclosed that during the recent Estimates Committee meeting in preparation for the 2011 Budget, the Committee which comprises of the Cabinet of Ministers and advisers from the Ministry of Finance and the Ministry of Sustainable Development interacting with relevant representatives of the different ministries and departments of government, “we came to the conclusion that we shall focus our attention as much as possible on generating growth.”
 
He said that Minister of Tourism and International Transport, Sen. the Hon. Richard Skerritt and the Permanent Secretary in the Ministry of Sustainable Development, Mrs. Hilary Hazel have been asked to organise a Growth Forum.
 
“We would want to make sure that with the changes taking place in the restructuring of the economy, that the economy will not go into further recession, but will be allowed to grow and so we want to make sure that we can discuss with our private sector, our stakeholders, how the government can work with them in ensuring that growth is achieved in the country,” said Prime Minister Douglas.
 
Dr. Douglas said it was why he reacted to this claim that economic growth in St. Kitts and Nevis over the next five years will be 0.3 percent. “That in fact attracted a reaction from the IMF, that those who framed that article made an error of averaging and that should not have been done,” said the Prime Minister.
 
He said that growth is critical at the end of the day in ensuring that even though structural changes are been made in the economy “we would still be in a position to grow the economy.”
 
“As we move forward at this critical time, we continue to do our assessment. We continue to discuss and have the necessary consultations. We can achieve the target date,” said Prime Minister Douglas.