VAT – an important component of globalization
Basseterre, St. Kitts, May 29, 2010 (SKNIS) – The Government of St. Kitts and Nevis has been credited for taking the bold step to fulfill international obligations and reform the local revenue administration by implementing a Value Added Tax (VAT).
Therese Turner-Jones, Programme Coordinator of the Barbados-based Caribbean Regional Technical Assistance Center (CARTAC) told SKNIS that she was “proud” of the Federation which is addressing fiscal imbalances with an efficient VAT.
“St. Kitts and Nevis is one of the smaller countries in the CARICOM (Caribbean Community) membership and this is quite a big step,” Mrs. Turner-Jones said, noting that larger jurisdictions such as Suriname and the Bahamas are still debating this issue. “A number of other countries in the OECS (Organisation of Eastern Caribbean States) have done it successfully … and I think that demonstrates it is possible to do it in small open economies.”
Locally, VAT will replace 12 nuisance taxes including the Cable TV Tax, Export Duty and the Consumption Tax which is currently charged at 22 percent. VAT exists in more than 150 countries around the world and is featured in many European territories. Officials in the United States are reportedly considering the introduction of the tax as well.
The CARTAC official revealed that six years ago, the tax commission of the Eastern Caribbean Currency Union (ECCU) suggested that “all of the countries in the OECS move to a VAT in order to eventually lower trade tariffs.”
This was deemed critically important as CARICOM continues to sign trade agreements with Europe, Canada and other regions under the banner of trade liberalization.
“With the CARICOM Single Market and Economy (CSME) we are talking about harmonizing tax systems across this [Caribbean] Region. As far as CARICOM is concerned, this is a very positive step for St. Kitts and Nevis because it moves us a little closer to meeting some of the harmonization requirements that CARICOM is looking for in all of its member states,” Mrs. Turner-Jones stressed.
CARICOM States with VAT include Barbados, Trinidad and Tobago, Guyana, Dominica, Grenada, Antigua and Barbuda, as well as St. Vincent and the Grenadines.
The Value Added Tax is scheduled to be introduced in the Federation on November 01, 2010. Public consultations and stakeholder meetings are currently being conducted to ensure a smooth transition to the administration and revenue collection procedures.