BASSETERRE, St. Kitts - ALTHOUGH the matter is said to have been looked at and consideration has been given, consumers would not yet be seeing a reduction in the Value Added Tax (VAT).
Prime Minister and Minister of Finance the Rt. Hon. Dr. Denzil L. Douglas, in his response to a question posed at his monthly Press Conference on Wednesday (Apr. 23), said that there has been consideration given to reducing VAT but one could not yet be given.
Dr. Douglas stated that the VAT was introduced to provide quick stabilisation to the economy at a time when the government had difficulty meeting financial commitments but, at this time, there were still concerns about the sustainability that revenue taxes are providing.
"We have always said that the rate of VAT was always a rate that was going to be re-examined in the future...We knew that 17 percent was going to give us the necessary returns that would have helped us to stabilise the economy, the financial situation very quickly.
"We are still concerned with regard to the sustainability of revenue from taxes and so we would want to make sure that if we are going to do anything with the VAT rate, that whatever the rate is after adjustment, it is sustainable in terms of maintaining the fiscal stability and the fiscal balance that we have been seeking over the last four, five, six years."
The Finance Minister told the press that his Ministry did not want to make hasty decisions, but gave his commitment to consumers that the VAT rate would be looked at again.
"We've had the opportunity...at the time of the last budget we looked at it and we contemplated making changes. We however did not follow through because we said we would want to wait a little longer and for the analyst to do the necessary analysis and advise us correctly.
"We don't want to lower it and then we have to put it back up again, so we want to make sure that the appropriate analysis is being done and then we would make a decision," the Prime Minister indicated.
He however assured that his government does not intend to burden anyone.
