Cabinet continues to review proposals for VAT rate
ST. KITTS, JUNE 22, 2010 (CUOPM) – The St. Kitts and Nevis Cabinet has been reviewing important studies and analyses submitted by the Barbados-based Caribbean Regional Technical Assistance Centre (CARTAC).
At the recent meeting of the Cabinet, presided over by Prime Minister and Minister of Finance, Hon. Dr. Denzil L. Douglas; the Financial Secretary, Mrs. Janet Harris and the Deputy Comptroller of Inland Revenue, Mr. Edward Gift, informed there was ongoing consultation on the draft White Paper on VAT and that the consultation was being used to generate ideas and feedback for the improvement of the VAT implementation Process.
In looking at the proposals for a possible VAT rate, Cabinet reviewed important studies and analyses on VAT that have been done by CARTAC. It has been suggested that a VAT rate under 20 percent be implemented to replace about a dozen existing taxes. Specific details on the VAT rate will be finalized shortly and communicated to the public.
Attorney General and Minister of Justice and Legal Affairs, Hon. Patrice Nisbett, indicated that he was prepared to have the appropriate VAT legislation put before the Cabinet for passage to the Parliament in the next few weeks, and that he expected the entire public to pay attention and become part of the discussion surrounding the simplification of the indirect tax regime.
Federal Minister of Finance, Prime Minister Douglas, emphasized that VAT must be excluded from its application to a range of basic goods and services which include, but are not limited to interest and loan payments, some medicines for chronic diseases, bus fees, residential rent, local farmers’ produce, fuels such as gasoline, diesel, cooking gas and kerosene; articles specific to disabled persons, printed reading material, and limited amounts of imported food.
Considerable focus was placed on making the VAT system very easy to manage and to advance this objective, it has been approved to limit the number of businesses that will be able to collect VAT by establishing a lower threshold of about EC$150,000 in gross sales. That is to say that businesses whose annual gross sales fall below EC$150,000 will most likely not have to collect VAT.
Another critical aspect of the discussion was making allowance for the crossover point to the new VAT system and the kind of care that will be taken to ensure a fair and smooth transition to the new, improved and more efficient VAT system. Cabinet was assured that these matters are being addressed.