Above: downtown St George’s (CJ Photo)
By the Caribbean Journal staff
Grenada’s government plans to reduce the value-added tax on a group of items in a bid to stimulate the construction sector, according to Prime Minister and Finance Minister Dr Keith Mitchell.
The tax would reduce the VAT to 5 percent on a number of construction items beginning May 1 and lasting through Dec, 31, 2014.
The VAT cut will apply to sand, cement, roofing materials, steel, lumber and construction blocks. The government will also forego VAT on construction materials for projects valued at less than $400,000 in the same period, he said.
Mitchell urged Grenada’s banks to help make the package work, by offering “whatever it can” to encourage new mortgages.
Grenada has also begun a review of the country’s VAT, he said, although it is not yet complete.
That has come in response to growing discontent over the tax within the private sector, with some arguing that the tax discriminates against local purchases.
Mitchell said the government had “agreed that it would be best for economic activity and growth, if government allows VAT concessions to be enjoyed equally when the product is sourced locally, and when it is imported.”