GOVERNMENT is calling on the private sector to act accordingly with the rules and regulations governing the exemption of taxes on selected imported items into the country – in an effort to provide a level economic equilibrium in the face of spiraling costs of commodities.
As the authorities seek to employ measures to cushion the economic hardships that consumers face, there has also been complaints about ‘price gouging’ in the local retail market. These concerns had been directed to the ministry of commerce, and media reports indicate that personnel from that department are investigating the matter.
Nonetheless, Prime Minister Philip J Pierre has requested the business sector to comply with the Value Added Tax (VAT) exemptions policy.
The prime minister has appealed for “cooperation and compliance” with the recently implemented VAT exemption policy that applies to imported goods, such as; select building materials, personal care and female sanitary products.
“VAT is paid at the customs and every 21 days, there’s a reconciliation of VAT paid and VAT collected,” PM Pierre explained.
“At the end of 21 days, if you have collected more VAT than you pay, you are refunded your money,” he said. “And if you collected less VAT than you pay the government, we will give you back your money.”
PM Pierre debunked the notion of “old stock and new stock”, stating that “the VAT you pay on the old stock …on the stock that you have at the time of reconciliation is going to balance this off.”
Noting that “the government has shown a level of generosity never seen before in the history of Saint Lucia”, the prime minster urged the private sector “to work with the government …”.
He cautioned businesspersons to take heed that “the items where VAT has been removed, (to) allow the people to benefit from that concession.”
The VAT exemption makes provisions for local consumers to benefit from a 12.5% reduction in retail costs. Consequently, the government is offering companies and business owners a 100% waiver on penalties and interests on VAT arrears, from the 2021 financial year in the event that they settle their taxes in full by May1st, 2024.
According to government sources, more than $200 million in outstanding VAT arrears can be redirected into the economy.
Meanwhile, following multiple queries from the public, the prime minister reiterated that farmers and manufacturers will be exempt from importation charges relating to the Health and Security Levy.
“To ensure that their manufacturing sector and the agriculture sector do not pay (for) the Health and Security Levy that is on the imported raw materials,” said PM Pierre. “To ensure the manufacturing sector does not pay the Health and Security Levy on their raw materials and their packaging material, similar to the agriculture sector.”
PM Pierre adds that once the commodities has been “certified” by the Ministry of Commerce, the manufacturing sector will not pay the Health and Security Levy.
A government spokesperson stated that the cost of packaging products, raw materials and agricultural inputs will not attract the Levy, in order to keep production and manufacturing costs down for suppliers and retail prices lower for consumers.