BASSETERRE, St. Kitts – Prime Minister Dr. Denzil Douglas has announced a one day reduction in the Value Added Tax (VAT) rate aimed at stimulating the local economy during the Christmas season.
“There is going to be a special day next week. A reduction in the VAT rate to a special seven per cent on all sales of goods concluded on Thursday 22, December from 12:01 a.m. to 11:59 pm (local time), subject to special conditions,” he told legislators as he brought an end to the debate on the US$148.4 million national budget.
Douglas said eligible VAT registered businesses were required to participate and only charge VAT at the special rate during the 24 hour period.
He said the arrangement was hammered out during discussions this week between the government and officials from the St. Kitts and Nevis Chamber of Industry and Commerce.
“We shall remove ten per cent from the VAT on all shopping on that day. All goods including food that are being sold on that day will be sold, not at 17 per cent VAT, but at seven per cent,” Douglas told legislators.
He said that the range of goods includes building materials and appliances, but will not be applied to services.
“Wherever we can bring relief we shall. That is the nature of this Labour Government. It is a caring Government. This is a Government that dialogues, that listens and consults and asks for ideas and opinions,” said Douglas.
He said the decision to allow up to 400 pounds of food imported in the month of December and a EC$1,500 (US$555) allowance on goods was as a result of his administration listening to the pleas of the population.
“Now the local businessmen have said they too want a chance to do something and we say go ahead and do something. We will take off 10 per cent off the VAT,” said Douglas, adding that the private sector has engaged in various bargains and it is now for shoppers “to take a careful eye and do their assessment.
“I would ask our shoppers to be very careful. We want to help the business community and they have to be partners in our development. We cannot do it alone,” said Douglas, warning that members of the private sector who collect the VAT and do not pay it over to the Treasury.
“I want to warn them that if you are guilty of doing that, shoppers will not shop with you. You will not benefit from this reduction in the VAT by 10 per cent,” said Douglas.
He said VAT registered businesses that have not filed all of its VAT tax returns or settled all of its outstanding VAT tax liability as at December 19, this year, will not be eligible to sell goods at the special seven per cent rate. (CMC)
