Saint Lucians could look forward to a reduction in the Value Added Tax (VAT) before the end of the year, according to Prime Minister Allen Chastanet who recently stated that his government is looking at an October deadline.
The prime minister who addressed a press conference on Monday a few days after his first 100 days in office, said his government is working assiduously to deliver on promises made during the election campaign.
Chastanet said that a new VAT rate should be announced by the end of October.
“We have commissioned Ernst and Young to do a tax audit to review the existing tax structures that we have, and in particular VAT, to be able to come up with a number that everybody is going to be comfortable with,” he said.
According to him, the government is now in receipt of the Caribbean Development Bank report and is expected to get the Ernst and Young report in another three weeks.
“Once we have that, I am intending to announce the new VAT rate by the end of October.”
Minister within the Ministry of Finance Dr. Ubaldus Raymond said a reduction in the VAT will not compromise the country’s finances nor will it increase the burden on the public purse.
But the opposition Saint Lucia Labour Party has predicted that the current administration will be forced to restructure its tax system, in light of plans to introduce a reduction in VAT.
Opposition Leader Phillip J. Pierre has said that government will have no choice but to either re-introduce consumption tax or reduce incentives given to the local tourism industry, once VAT is introduced.
Saint Lucia was one of the last countries of the Eastern Caribbean Currency Union to introduce VAT in 2012.