Are St Lucians VAT ready?

The government of St Lucia will introduce a Value Added Tax in September, fulfilling what it called “undertakings given to international institutions by the former government” that VAT would be introduced during this financial year.
Prime Minister Dr Kenny Anthony had announced in the November 28 elections that there would be several conditions on VAT introduction if his party wins the election.
These included maintaining a basket of goods that would be “zero rated”—meaning no VAT would be imposed on those goods, and delaying the introduction of VAT on the payment of electricity and water bills until the government was satisfied that the public was “reasonably protected from arbitrary increase by the companies that provide these services.”
St Lucia’s VAT Implementation Unit is currently finalizing arrangements for the introduction of VAT.
Project Coordinator of the implementation project, Adria Rose Sonson says the exercise commenced in 2009 when the VAT office began preparing St Lucians for the implementation. She explained that a team from the VAT office held several meetings with various organizations including the “Tourism Association, Chamber of Commerce and banks.”
“I think generally St Lucians are ready and there are some things that need to be done to get people fully ready but in terms of awareness and the fact that VAT would be coming at some point in time, I think the message was well sold some many years ago,” said Sonson while explaining further, “What was missing was the final day for VAT implementation and we are all geared to get St Lucians ready for September 1st.”
Sonson further noted that the business sector needs to ensure their staff is well informed prior to implementation and all registered VAT businesses should display their certificate upon implementation.
“One of the things we are going to do is to offer free support. Therefore, we will be working hand in hand with business places. Every business place that is registered to collect VAT will be visited by our staff who will work with them one-on-one to ensure that they are ready.
“The law requires that a business person collecting VAT on behalf of the government prominently display their VAT certificate. No one should be taking VAT from anybody unless they show that they have been given the responsibility to collect the VAT and if at all as a consumer you think there are some issues, it is your responsibility to call the VAT office and get clarification so that we can undertake whatever research to ensure whoever is doing what is in compliance with the law,” said Sonson.
The unit plans to intensify its work in the coming weeks in order to better inform the public and the private sector about information relevant to the VAT’s implementation.
Meanwhile, economist Richard Peterkin says the VAT has been a long time coming and this is “quite possibly the only way we can get meaningful tax reform policies.”
He said: “As part of the overall tax reform initiative with the Central Bank and the governments have undertaken, they have realized this is the only way they can get meaningful tax reform because it captures a wider section of our economy.
“It brings in services that in many cases would not get that same level of taxation and it is essentially inevitable,” said Peterkin.
He also noted that government should implement the new tax system “in a way that is fair and does not harm the disadvantaged and will essentially assist government in getting the rightful revenues without making the cost of goods too expensive for all of us.”
In response to whether St Lucians will be ready by September 1st, Peterkin took a short pause before saying: “When it comes to new legislation or change, people are always not ready.
“They always complain there is not enough time; the Chamber who went on record as saying they would basically support VAT but they asked that they be given six months; and six months is from the time that the government announces it will be implemented to the actual implementation date and with the presence of legislations etc. So clearly they are not going to have that this time.
“I think that if we continually say that we are not ready, we would never start. If we accept that it has to happen then we all have to make a move to try and get ourselves ready.”
He went on: “There are clearly some industries that are affected more than others by a quick start. Hotels for example generally need an
18 month period for any
new rates or effect on their rates and it would be very difficult to get 18 months in this case, so there are some that will be affected more than others.”
Peterkin believes if everyone involved contributed to the implementation process including educating the public and business places then implementation by September 1st will be successful.