St Lucia Prime Minister Pledges Cushion for Poor in Implementing VAT

By: Caribbean Journal Staff - April 18, 2012

By the Caribbean Journal staff

While St Lucia is preparing to implement a new Value Added Tax in September, Prime Minister Dr Kenny Anthony is vowing to cushion the impact of the tax on the country’s poor.

“The big issue for government is to protect the poor and vulnerable, particularly at this time, as we are going through a period of economic difficulty, economic crisis and economic adjustment,” Anthony said.

Unemployment stands at 24 percent in St Lucia, according to Anthony, and the Prime Minister said the government would maintain a policy of so-called zero-rated items, meaning a basket of goods that will escape the VAT tax.

“Of course there will be differences between us and the former government on the contents of the basket, but we both agree that this it the right way to go, so we will maintain that and the government will not impose VAT on water and electricity at this time,” Anthony said.

According to Anthony, if St Lucia were not to implement the tax, it would be subject to a legal challenge by at least one foreign government, although he did not name the country.

Anthony has previously said that the government would delay the introduction of VAT on the payment of electricity and water bills until the government is satisfied that the public is “reasonably protected from arbitrary increase by the companies that provide these services.”

St Lucia is the only country in the OECS which has not yet implemented the Value Added Tax.

The VAT will go into effect Sep. 1.

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