St. Kitts and Nevis Parliament approves VAT legislation, opposition benches empty when vote taken

St. Kitts and Nevis Prime Minister and Minister of Finance, Hon. Dr. Denzil Douglas wrapping up three days of parliamentary debate on Wednesday night (photo by Erasmus Williams)

BASSETERRE, ST. KITTS, AUGUST 12TH 2010 (CUOPM) – St. Kitts and Nevis Prime Minister and Minister of Finance, Hon. Dr. Denzil L. Douglas wrapped up a three-day debate on the impending Value-Added Tax (VAT), on Wednesday night, escribing the measure as a necessary component of his Federal Government’s economic stabilisation plans.

When the vote was taken at 8: 00 P.M., after spending 50 minutes in Committee Wednesday night, the opposition benches were empty.

“The global situation is harsh. It is still not settled in the way one expected it to settle. We do not have the luxury, therefore, of delaying anything. We have to move forward,” Dr. Douglas told Parliament as he brought the debate to a close with a two and a half hour presentation.

“We have to move forward on our programmes. That is why the Eastern Caribbean Central Bank … is working closely with the various governments in the Eastern Caribbean Currency Union to ensure that we stay on course in terms of stabilisation of the economy and ensuring that there is growth and development,” he added.

When the bill was voted upon and passed at the end of the debate, the Opposition benches were empty.

The VAT, which has been set at 17 per cent, takes effect from November 1.

Prime Minister Douglas, who took over the Finance portfolio after his St. Kitts-Nevis Labour Party secured a fourth consecutive term last January, insisted that the central government is doing its part to stabilise the economy of St. Kitts and Nevis.

“Having the VAT introduced is only one part of it. I can assure you that we are paying very, very careful attention to the situation at home,” he said, adding that the Cabinet has before it a document from the Finance Ministry outlining how various ministries have been controlling their expenditure.

Additionally, Prime Minister Douglas said other government agencies and departments have also been working with the Government’s Entities Oversight Board to make sure that expenditure is kept in check.

This, he said, is “to ensure that everybody stays on course.”

“These are some of the things that we are doing, Mr. Speaker. We are not just coming in here and introducing a VAT. We’re being very, very prudent in the management of the government’s affairs,” he said.

Members from the PAM/CCM were absent on the opposition benches when the vote was taken on Wednesday night (photo by Erasmus Williams)

Dr. Douglas said further that his Labour administration is in the process of implementing “a comprehensive plan to stabilise the economy and promote growth and development in order to move our country forward.”

“Our policy is not to introduce any new tax and leave it there. It is to do other things, to have replacement taxes and really stabilise the economy and move our country and our people forward.

“We will do other things,” he promised.

“Mr. Speaker, we will, of course, have to look at a business tax, the new corporate tax – we will reduce it from what it is today. I gave a commitment to the business community. I keep my word. We will reduce the corporate tax to ensure that the business community does not have pain and making sure that it is working with them. We want it to work all over.”

Prime Minister Douglas said the government wants to ensure that the local business community has the opportunity to improve its competitiveness and has already taken steps to address that.

“We’ve put in place the Competitiveness Council, which is working … it has had a body of recommendations to bring to my attention, I understand, as to how we can stimulate the economy and making sure that we are more competitive as a jurisdiction in dealing with the rest of the world.

“This is a comprehensive package and the introduction of VAT is only one aspect of it,” he said.

Among the taxes being abolished with the introduction of the VAT are the Consumption Tax, the Hotel Accommodation and Restaurant Tax, the Cable TV Tax, the Vehicle Rental Levy, the Insurance Premium Tax, the Export Duty, the Public Entertainment Tax, the Lotteries Tax, the Gaming Machine Tax, the Traders Tax, the Telecommunications Levy, the Island Enhancement Fund and the Parcel Tax.

The government said there would be exemptions for a range of basic goods and services including 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 some imported food.

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