CASTRIES, St. Lucia, Wednesday November 9, 2016 – St Lucians are getting an early New Year gift from Prime Minister Allen Chastanet.
He has announced that from February 1, 2017, the island’s Value Added Tax (VAT) rate will move to 12.5 per cent, down from the current 15 per cent.
In a televised national address on Monday night, in which he announced the VAT reduction in keeping with his United Workers Party’s (UWP) election campaign promise, Chastanet declared that the tax had “destroyed” businesses and drained St Lucians to the core.
“We promised the people of St Lucia a restructured tax regime that would be less burdensome without compromising the revenue base and we aim to keep this promise,” he said.
According to the Prime Minister, the move would put an estimated EC$52. 5 million (US$19.4 million) a year back into the hands of citizens who have been pleading for relief from the tax measure.
Chastanet made it clear his government did its homework before taking the decision, revealing that a comprehensive review of the tax that had replaced a raft of duties and taxies, was conducted by Ernst and Young.
The government also consulted with the Caribbean Development Bank, the Eastern Caribbean Central Bank and the International Monetary Fund.
Prime Minister Chastanet also served notice his government would continue to review the island’s tax regime.
“St Lucia, we have done it; and we will do more,” he said, adding that his UWP administration was seeking to overhaul the country’s tax system to grow the economy, reduce the burden on citizens and attract more investors to the island.
St Lucia was one of the last countries in the Eastern Caribbean Currency Union to introduce VAT. The tax was implemented in October 2012 by the former Kenny Anthony-led St Lucia Labour Party administration.