BASSETERRE, ST. KITTS, NOVEMBER 2ND 2010 (CUOPM) –St. Kitts and Nevis Prime Minister and Minister of Finance, Hon. Dr. Denzil L. Douglass warned businesses who are collecting the 17 percent Value Added Tax (VAT) and are not registered to stop immediately.
“That comes to an end today (Monday). Nobody is allowed to collect any VAT and they are not registered to collect it. Nobody is going to use the excuse of VAT for carrying up their prices beyond what has been agreed by law or by executive authority of the Government,” Prime Minister Douglass told officers of the VAT Office within the Tax Reform Unit late Monday afternoon, after a briefing upon his return from the PANCAP 10th Annual General Meeting in nearby St. Maarten.
Dr. Douglas told the VAT Office staff that the warning must go out that as of Tuesday morning “they must begin to deal forthwith with any person who is supposed to be collecting VAT on behalf of the Government and in doing so, is misrepresenting what they should be doing.”
“Whether they are charging too much or they are undercharging that has to be rectified by them, because at the end of the day, the Government knows what VAT it should collect and it shall collect what is due to it by law. Make sure you know and understand what you are supposed to do to protect the consumer and you do it with the full support of the law,” said Prime Minister Douglas.
He readily admitted that there are going to be teething problems. “We know that and we recognise that, but where it is deliberate where people are carrying up their prices and saying that it is because of the VAT, that is not going to be accepted at all and you must deal firmly and swiftly with such persons,” said Prime Minister Douglas, who is also Minister of Finance,
“You have full charge and full responsibility by law, by the executive support of the Government to do your duties, fairly, fearlessly and squarely and make sure that at the end of the day, we are bringing into being a system that will be revolutionising the way tax is paid in St. Kitts and Nevis.
The Value Added Tax (VAT) of 17 percent replaces a 22.5 percent Consumption Tax and 11 other nuisance taxes.
Ahead of the introduction of Value Added Tax (VAT) on November 1st, the Cabinet has approved the complete removal of import duty on several food and non-food items.
Twenty items have been reduced to zero percent and seven others reduced by five and 20 percent.
These went into effect with the implementation of the 17 percent Value-Added Tax and the abolition of the 22.5 percent consumption tax. Since September Government had reduced the Consumption Tax from 22.5 percent to 17 percent.
The import duty has been completely removed from Tuna (canned); Sardine (canned); Skipjack and Bonito (canned); Sardinella, Brislings/Sprats (canned); Salmon (canned); Herrings (canned); Mackerel (canned); Chicken; Cheese; Canned Sausages; Corn Beef; Salt Fish/Herrings (Fresh); Mackerel (fresh); Salmon (Fresh); Ham (smoked, chilled, frozen); Baby Beverages (Juices); Pig Tails, Ears and Snout; Exercise books; Insecticides and rodenticides.
The import duty on Pasta, Margarine/Shortening/Lard and Vegetable Oil has been reduced from 25 percent to 10 percent and Tomato Ketchup from 20 percent to 5 percent.
The import duty on Eggs has been reduced from 40 percent to 20 percent and mosquito coils from 25 percent to 5 percent.
Several items and services are zero-rated including adult disposable diapers, Baby disposable diapers, Bread, Flour, Fuel, Infant Formula, Milk, Oats, Rice, Sale of commercial property from one VAT registrant to another and Sugar.
Regarded as exempt imports are goods if the Comptroller is satisfied that VAT has previously been paid on the sale or importation of such goods; Challenge Cups and other trophies presented to participants in an event outside of the Federation; Currency notes and coins imported under the Eastern Caribbean Central Bank Agreement; Goods temporarily admitted in the Federation for repair, cleaning or reconditioning, including parts associated with that work; the human remains of a person who has died abroad; unconditional gift of goods without consideration to an approved religious organization and not for sale and unsolicited gifts of food of 45 kilograms.
Exempt supplies include supply of basic construction services on a residential home, a supply of medicines for chronic diseases approved by the Chief Medical Officer, a supply of printed matter, articles and which items include books, newspapers and pamphlets; a supply of the following agricultural inputs: (seedlings, seeds, cuttings, fertilizers, herbicides, fungicides, nematicides approved by the Minister of Agriculture; animal feed other than food for domesticated animals generally held as pets; plant propagation bags; poultry, eggs produced locally by the producer; fibre-glass and wooden boats, anchors, G.P.S, compass, V.H.F. Radio. Bus & Taxi Fees, Education services, Electricity, Insurance, Interest on loans, locally produced agricultural produce grown in the Federation, Medical services, Residential Rent and Residential Water.
