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St. Kitts and Nevis Information
VAT Tax coming to St Kitts and Nevis
2010-03-26 18:45:34 by
St. Kitts and Nevis has announced November 1st 2010 as the date for the introduction of Value Added Tax (VAT) in the twin-island Federation. Prime Minister and Minister of Finance, Hon. Dr. Denzil L. Douglas said there are too many indirect taxes at different rates that make the system complex and it will replace several taxes.
Douglas said, "A VAT would streamline the tax system by replacing the Consumption Tax, Hotel and Restaurant Tax, Cable TV Tax, Traders Tax, Vehicle Rental Levy, Export and Rum Duty, Telecommunications Levy (IDD Calls) and Parcel Tax.?
He said that the proposed VAT must be seen as an opportunity to completely reform the existing tax structure. VAT will apply to many services which have not been bearing their fair burden, even though they are full beneficiaries of the economy.
?A VAT regime will provide some measure of fiscal stability as it is capable of generating reliable and consistent revenues for the Government,? said Douglas. He added that in many developing countries, like St. Kitts and Nevis, the tax base is narrow, so governments must rely on relatively high tax rates to generate revenue.
?Fortunately, we have managed to keep our tax rates relatively low and attractive notwithstanding our small size, but we must enhance the coverage of our taxes if we are to continue to keep our tax rates sufficiently low to attract investment and foster productivity. Successfully reforming our tax system will involve shifting from a reliance on a narrow international trade base plus a limited domestic production base to a broader consumption base. This is precisely what a tax like the VAT will do,? said Dr. Douglas.
Jamaica, Barbados and Trinidad and Tobago have implemented VAT with positive results for several years. Belize, Dominica and Guyana have also introduced a VAT since early 2006. Our fellow OECS countries such as, Antigua and Barbuda, St. Vincent and the Grenadines and Grenada have recently introduced VAT, while Saint Lucia is currently working on the implementation of VAT within the next year. The implementation of VAT in the Federation will foster harmonization in the Eastern Caribbean Currency Union.
For more information on VAT, read ZIZOnline, and St Kitts-Nevis Observer,
Douglas said, "A VAT would streamline the tax system by replacing the Consumption Tax, Hotel and Restaurant Tax, Cable TV Tax, Traders Tax, Vehicle Rental Levy, Export and Rum Duty, Telecommunications Levy (IDD Calls) and Parcel Tax.?
He said that the proposed VAT must be seen as an opportunity to completely reform the existing tax structure. VAT will apply to many services which have not been bearing their fair burden, even though they are full beneficiaries of the economy.
?A VAT regime will provide some measure of fiscal stability as it is capable of generating reliable and consistent revenues for the Government,? said Douglas. He added that in many developing countries, like St. Kitts and Nevis, the tax base is narrow, so governments must rely on relatively high tax rates to generate revenue.
?Fortunately, we have managed to keep our tax rates relatively low and attractive notwithstanding our small size, but we must enhance the coverage of our taxes if we are to continue to keep our tax rates sufficiently low to attract investment and foster productivity. Successfully reforming our tax system will involve shifting from a reliance on a narrow international trade base plus a limited domestic production base to a broader consumption base. This is precisely what a tax like the VAT will do,? said Dr. Douglas.
Jamaica, Barbados and Trinidad and Tobago have implemented VAT with positive results for several years. Belize, Dominica and Guyana have also introduced a VAT since early 2006. Our fellow OECS countries such as, Antigua and Barbuda, St. Vincent and the Grenadines and Grenada have recently introduced VAT, while Saint Lucia is currently working on the implementation of VAT within the next year. The implementation of VAT in the Federation will foster harmonization in the Eastern Caribbean Currency Union.
For more information on VAT, read ZIZOnline, and St Kitts-Nevis Observer,