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Opposition Members Appeal for Elimination of VAT

Image of Dr Ernest Hilaire
Dr Ernest Hilaire during Tuesday’s sitting of the House reminded the Government of what he said were promises to the people of Saint Lucia to remove VAT.

MEMBERS of Parliament met at the House of Assembly on Tuesday October 29th to approve by affirmative resolution the draft Value Added Tax (VAT) Order which amends Schedules 1 and 3 of the Act. This amendment in the case of Schedule 1 will include a definition for the words “Educational supplies”; will include the supply of printing of educational supplies as a zero rated supply of service under item 2 (2); and in the case of Schedule 3, will exempt imports of personal items, food, clothing, toys and other household commodities, contained in barrels.

Under the 2nd Schedule of the VAT Act, the importation of educational supplies is treated as exempt supplies, whereas locally produced educational supplies are treated as standard regularities. This amendment will treat locally manufactured educational supplies such as books, magazines and leaflets as zero-rated supplies of service.

Although Parliamentarians unanimously approved of the draft VAT Order, members of the opposition called for the total elimination of VAT instead of an amendment of the VAT Act. Dr Ernest Hilaire reminded the Government of what he said was their promise to the people of Saint Lucia to remove VAT. This was what sparked the heated debate among Parliamentarians on the origin, the presence and direction of VAT in Saint Lucia.

Guy Joseph, Parliamentary Representative for Castries South East and Minister for Economic Development, took the opportunity to remind opposition members that it was the SLP Government, under the leadership of former Prime Minister, Dr Kenny Anthony, which implemented VAT, despite the fact that Anthony, previously, said that VAT was an oppressive tax. Joseph further stressed, “If you wanted us to eliminate VAT, why did you introduce it in the first place? You said it was oppressive so you meant to oppress the people of Saint Lucia by introducing an oppressive tax.” He added, “When they introduced VAT, they introduced VAT in a manner that gave the foreign entities an edge over the local manufacturers, and that is the wrong that we are putting right in this honourable House today.”

Image of Minister for Economic Development Guy Joseph.
Minister for Economic Development Guy Joseph fired back pointing a finger to the implementation of VAT under an SLP administration.

Joseph announced that there would be further reduction in taxes for the people of Saint Lucia, as he held the announcement of that commitment in contrast to the VAT increase which he said the former SLP administration was in the process of considering. Among these further reductions, the minister said, “I want to inform members opposite and the people of Saint Lucia, by the next sitting of this House, I expect that we will come with the bill that we promised, that the people should not have to pay VAT on funeral expenses.” He further stated, “I look forward to the relief on funerals – VAT exempt. I look forward to the next sitting of this House when we can deal with the VAT exemption for LUCELEC and WASCO for reconnection fees.”

Members of the opposition continued to appeal for the elimination of VAT in the House of Parliament. Dr Ernest Hilaire, in support of the Opposition, said that it was the previous UWP Government which signed the agreement to introduce VAT in the first place. He said that the previous UWP Government had set up the VAT office during its 2006/2011-term. Hilaire stated, “The present member for Micoud South [Allen Chastanet] said that it was a good tax.” Hilaire stated further, “But the fundamental issue is that the members on the other side promised to remove VAT. Three and a half years later, we come into the house to have an amendment for educational supplies.” Hilaire put the following question to the Speaker, “When are we going to get the elimination of VAT? When are we getting the elimination of the VAT and its replacement for sales tax? That is what was promised.”

Image of Parliamentary Representative for Vieux Fort North, Moses Jn Baptiste
Parliamentary Representative for Vieux Fort North, Moses Jn Baptiste

Moses Jn Baptiste enthusiastically reiterated that it was the previous UWP Government which introduced VAT at the suggested rate of 15%. He read a former budget speech of then Prime Minister, Stephenson King, which contained the introduction of VAT. Jn Baptiste said that the former SLP Administration had simply followed through with what the previous UWP Government had put in place, stating that it was hypocritical of the present administration to imply that they had no part to play in the issuance of VAT.

Stephenson King, Parliamentary Representative for Castries North, admitted to Jn Baptiste’s claim, stating that VAT was a recommendation of the Tax Commission of the Eastern Caribbean Currency Union (ECCU). He said VAT was introduced on the basis of the economic situation at the time. It was stated further, that VAT could not have been implemented initially due to the economic difficulties which resulted from Hurricane Thomas and the 2008 Financial Crisis among other issues.

The Opposition maintained that the Government was running out of time to deliver on their promise to completely eliminate VAT within their first five years in office. King further remarked, “Every time we recognise there is a need for a reduction as we did with the 2.5% reduction, we took the decision to reduce and to give some relief to the people of this country.”

Allen is a reporter employed at The Voice Publishing Company. He has had a passion for reading, writing, story telling and theater for as long as he can remember. His interest in history, philosophy and the human condition, have inspired him to think deeply about life which has in turn given him many things to write about. He enjoys writing articles which educate, inspire, and enlighten the reader; and articles which provoke the reader to look at things from a fresh and different perspective.Read full bio...

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