CASTRIES, Saint Lucia -- One year after the imposition of what he had, in opposition, described as an “oppressive tax”, Prime Minister Kenny Anthony has been called upon to provide the nation with a “report card” on the implementation of value added tax (VAT).
During the delivery of his 2012-2013 Budget, Anthony outlined a number of policy measures, promises and claims related to the imminent implementation of VAT.
According to Anthony, a “macro-economic effect is that VAT can have a positive impact on investment”. In designing the VAT, he added, “we (the government) have taken the deliberate decision to exempt capital goods used in the production process.” He further stated that “in respect of the hotel sector and related services, a reduced rate of 8% will apply until March 31, 2013. Between September 1, 2012, and March 31, 2013, the impact on the sector will be assessed and a final determination will be made on the rate to be applied beyond March, 2013.”
Anthony also said he believed “in the final analysis VAT will benefit the country as a whole as it will provide the needed financial resources to allow the government to be in a better position to provide for the citizenry and to better manage the fiscal affairs of the country.”
As we mark one year after the implementation of VAT, the UWP said, it is a timely and critical juncture for the prime minister and minister with responsibility for finance to report to the nation on: 1. Revenue generated from VAT over the past year; 2. How has that revenue being utilized to benefit the citizenry? 3. Effects of the 1.5% increase on the hospitality sector, ref. 2013-2014 Budget; 4. Has VAT had a positive impact on investments and the manufacturing sector? 5. How is the revenue from VAT being used to reduce the spiraling unemployment problem, which is manifested by an increase of 3% in 2012 over 2011?
“Mindful of the persistent calls from key sectors such as the Saint Lucia Medical and Dental Association and cries of despair from a population reeling under the impact of the Value Added Tax, the United Workers Party reiterated the call for the removal of VAT on medication,” the UWP said.
The UWP also called on the government to give serious consideration to a reduction of the VAT rate from the existing 15% to enable greater disposable income and to stimulate economic activities.
“Government is called upon to address repeated calls by the Saint Lucia Manufacturing Association for adjustment in the collection of VAT charges to a post production regime. It is our hope that the government of Saint Lucia will use this juncture one year after the imposition of the value added tax to reflect on the negative impacts and to initiate a process to effect the necessary positive adjustments,” the UWP concluded.