Consumers and businesses in St Lucia are in for a big break as a reduction in Value Added Tax (VAT) takes effect.
In keeping with a campaign promise made leading up to the June 6 general election, the United Workers Party (UWP) administration slashed the VAT from 15 to 12.5 per cent.
Prime Minister Allen Chastanet said the move is not only intended to ease the financial strain on households and businesses but it will result in positive dividends for the economy
“We believe [the VAT reduction] will cause the economy to grow,” he said.
He also dismissed concern that Government would lose significant revenue because of the reduced tax.
“While the rate may go down, it is anticipated with the growth of the economy that the total amount of money we are collecting will remain the same or, in fact, even grow,” St Lucia News Online quoted him as saying.
Chastanet insisted that taxation is not “an entitlement of government,” and hinted that St Lucians could also expect more tax ease.
“My administration will continue to undertake a full restructuring of the tax system, with the aim of increasing overall national consumption, reducing the cost of living and easing the burden on households and businesses,” he said.
Arguing that heavy taxation often backfires, the Prime Minister said Government would conduct a complete assessment of personal income tax and corporate tax.
The former Kenny Anthony administration had introduced the Value Added Tax in October 2012. St Lucia was the last Caribbean Community (CARICOM) member state to introduce the tax that replaced a string of other taxes and duties. (Caribbean360.com)