Prime Minister Douglas implores businesses not to exploit the poor following the introduction of VAT
ST. KITTS, AUGUST 13, 2010 (CUOPM) – St. Kitts and Nevis Prime Minister Hon. Dr. Denzil L. Douglas has implored with businesses not to use the introduction of the Value Added Tax (VAT) to exploit the poor but to be honest and decent in their businesses practices.
Speaking in the National Assembly, Prime Minister Douglas said Government has taken measures to provide additional stimulus and protect the vulnerable when the Value Added Tax (VAT) is implemented later this year.
“Apart from the reduction in the cost of most goods which is anticipated as a result of the difference between the Consumption Tax rate and the VAT rate, we are also seeking to provide additional stimulus to the economy at this time,” said Prime Minister and Minister of Finance, Hon. Dr. Denzil L. Douglas.
“Therefore in order to boost employment in the construction sector in particular we have decided to delay VAT on the labour component of the construction of dwelling houses for a period of twelve (12) months. We expect that the resulting acceleration in the construction of dwelling houses will stimulate growth in the economy,” said Dr. Douglas.
The Federal Minister of Finance said the Government is very concerned about any potential unfavourable impact of the VAT on the poor and vulnerable in particular.
“This is why we are imploring all businesses not to use this opportunity as a means to exploit the poor but to be honest and decent in your business practices. This means that the markup for goods that you will offer for sale should not be calculated on the input VAT that you pay at Customs for example because you will be able to claim this amount back from the Inland Revenue Department when you submit your output tax. Your markup should only be calculated on your value added,” said Dr. Douglas.
He pointed out that his St. Kitts-Nevis Labour Government has included a number of basic food and other items on the list of zero rated goods specifically targeted at assisting the poor and vulnerable.
“In addition you would also observe the exemption of water, 150 units of electricity, educational services and domestic transport to name a few. Government also continues to take a close look at the social safety nets which we currently have in place to ensure that those who really need assistance receive such assistance. We are of the firm belief that a more reliable stream of revenue would allow government to do even more to protect our youths and all those who are in need of such protection in our society,” said Prime Minister Douglas, who is also Minister of Finance.