Amendments to fiscal incentive bill is in keeping with international best practices on taxation
BASSETERRE, St. Kitts, December 27, 2019 (Press Unit in the Office of the Prime Minister) — The Team Unity-led Government of St. Kitts and Nevis continues to do all within its power to protect the Federation’s reputation as a responsible and cooperative tax jurisdiction.
It is in this regard that Prime Minister and Minister of Finance, Dr. the Honourable Timothy Harris, today (December 27) moved the Fiscal Incentives (Amendment) Bill, 2019, in the National Assembly.
According to the prime minister, the need for amendments arose after the European Union Code of Conduct Group on Business Taxation (EU CoCG) evaluated the Fiscal Incentives Act (the Act) Chapter 20.14 of the revised Laws of St. Christopher and Nevis 2009 on the basis of its tax governance criteria. After the evaluation, the Act was considered as potentially harmful by the Group. The EU CoGC subsequently requested that the Government of St. Kitts and Nevis make a high-level political commitment to have the potentially harmful features of the Fiscal Incentives Act abolished or amended by December 31st, 2019.
The responsible Team Unity administration, in response to the concerns of the EU CoCG, gave a commitment to conduct a review of the Fiscal Incentives Bill and amend or abolish features of the Act which do not conform to the EU tax good governance criteria.
“We have come to reinforce our commitment as a Government and as a people to act as a responsible member of the international community and to cooperate on matters of international tax governance in particular, and good governance in general. We have come to protect the reputation of St. Kitts and Nevis by ensuring the integrity of our systems and to deny participation of reprobates or illicit actors in our socioeconomic space,” said Prime Minister Harris in the National Assembly.
The three principal amendments being proposed to the Act are: 1.) amend the definition of an “Enclave Enterprise” in Section 2 (‘Interpretation’) of the Act to lift the requirement to “produce exclusively for export”, such that Enclave Enterprises are permitted under law to sell goods within the Common CARICOM market and in the local market; 2.) repeal the Export Allowance as per section 16 and the Second Schedule of the Act. A grandfathering provision is being inserted to indicate that there must be no new claimants for an Export Allowance from January 2020 and outlining that benefits to current claimants will continue up to 31st December, 2022; and 3.) insert a provision to declare that the rules of profit attribution, which are expressed in section 4A and 4B of the Income Tax Act apply equally to the Act.
Prime Minister Harris noted that in its fiscal policies, the Team Unity administration will always be responsible and prudent, and “will continue to work hard as part of the creation of a modern economy that will lead to an enlargement of the economic freedoms of our people.”
With the full support from the Government benches, the Fiscal Incentives (Amendment) Bill, 2019 made its way through the various stages and was successfully passed.