EC Daniel Building

Despite the government’s disinclination to announce the rate of the impending Value Added Tax (VAT), relevant officials are forging ahead with implementation plans.

Prime Minister and Minister of Finance Dr. Denzil Douglas informed recently that the education drive to sensitize the public and business stakeholders on the VAT was well underway.

“We’ve had consultations with a wide cross section so far of businesses and the general public, and we’ve had specific meetings with stakeholders. We’ve had town hall meetings and through a series of consultations and focus group meetings with the businesses in the different economic sectors, and using of course our radio and television discussions in both St. Kitts and Nevis, this publicity and educational campaign has been on its way,” he said.

He noted that information regarding VAT was available online and provided interested persons with relevant data and updates, in addition to leaflets and pamphlets strategically placed at various public places to keep residents up to date about the implementation progress.

“To reach out to stakeholders who are unable to attend any of the town hall meetings, the Unit has conducted a VAT talk every Thursday morning on Sugar City Roc talk show Journey. In addition, there is a bi-weekly VAT talk that is held on Winn FM’s Voices,” the Prime Minister added.

In order to ensure the proper administration of the VAT, Dr. Douglas said certain organizational reform is ongoing in the Inland Revenue, and Customs and Excise Departments. He also took the time to commend those engaged in the exercise of pursuing the tax reform process.

“We have put in place operational committees and they have been set up in both departments to specifically address VAT implementation issues. Additional staff is being assigned to join the Tax Reform Unit to assist in the execution of its mandate. We also have the Tax Reform Team which currently consists of twelve staff members,” he said.
The Tax Reform Unit would consist of Audit, Collection, and Refund sections, while the Tax Payers’ Services section within the Inland Revenue Department would be expanded and modernized to address VAT issues.

“Twelve additional auditors were scheduled to join the Unit on June 21st, six from St. Kitts and six from Nevis. There is a core group of officers from the Unit who have already received training in the management of the VAT system. Training is also being provided for the new pool of officers expected to join the Inland Revenue Department to assist in the VAT administration,” Douglas relayed.

All new staff at the Inland Revenue and Customs Department will have received a few days of VAT training this week, followed by a VAT legislative course from July 5 - 9. A third training module for the relevant officers, the Advisory Visit Training Course, is scheduled take place July 19 – 30, and a fourth module relating to individual advisory visits for businesses is slated for the first week of August.

Dr. Douglas informed that the Tax Reform Unit was expected to commence operations this week and would benefit from technical assistance offered by neighboring islands with operational VAT systems. The Unit is to be housed in the EC Daniel Building on Cayon Street.

He said that both the Inland Revenue Departments on St. Kitts and on Nevis had already commenced work ensuring that their systems were ready for the implementation of VAT, and that the installation of the VAT module is expected to be carried out by the end of August.

Cabinet recently announced that a VAT rate of under 20% was being considered, taking into account studies and analyses conducted by Caribbean Regional Technical Assistance Centre (CARTAC).

According to a post-Cabinet press briefing, “Attorney General and Minister of Justice and Legal Affairs, Hon. Patrice Nisbett, indicated that he was prepared to have the appropriate VAT legislation put before the Cabinet for passage to the Parliament in the next few weeks.”

People’s Action Movement Deputy Political Leader the Hon. Shawn K. Richards said that since Dr. Douglas’ administration had failed to meet the May target for the passage of VAT legislation, it “demonstrates the government’s gross lack of foresight and overwhelming disregard for accountability in the legislative process”.