[dropcap]O[/dropcap]n Tuesday, March 13, 2018 the Minister in the Ministry of Finance, Hon. Dr Ubaldus Raymond, held a press briefing to update members of the media, and by extension the people of Saint Lucia, on the country’s performance regarding the European Union (EU) blacklist, unemployment, debt and value added tax (VAT).
The minister began his address on the issue of Saint Lucia’s recent removal from the EU blacklist by announcing, “Today I am very, very pleased to report to the nation that Saint Lucia, through the commitments that they have made to the EU in addressing their concerns as it relates to tax matters . . . has been removed from annex 1 to annex 2, that is from the black list to the grey list.”
In December of 2017, Saint Lucia was placed on the EU blacklist, along with 17 other jurisdictions. But while our country has been removed, along with Bahrain and the Marshall Islands, three others have been added: Saint Kitts and Nevis, the Bahamas and the US Virgin Islands.
At Tuesday’s briefing, in response to questions surrounding the nature of the blacklisting, Raymond stated, “In essence, the EU will assess the tax regimes of every jurisdiction, and they look to see if the tax regimes fall in line with the standards that they will want to see. Not that our tax regimes may be wrong, hurtful or discriminatory but, based on the EU standard, they would say, ‘Make adjustments to fit these standards.'”
When asked whether the actions of the EU could be perceived as bullying tactics, the minister explained, “I would not say [we were] bullied; as I said, you have regulations, you have local, regional and international regulations in terms of tax matters and we are . . . in the process of complying and the first thing we did was to ensure that we give our commitment to address the concerns of the EU.”
Raymond also used the opportunity on Tuesday to provide input on the island’s unemployment rate. “We said that we will have a new Saint Lucia. Fifteen months later, I can report to the nation that unemployment has dropped from the 24.5% that we found; it is now 20.1%,” he pronounced before going on to praise the country’s growth performance. “Today we can boast and say that we are no longer the least performing jurisdiction in the OECS . . . today we can say proudly that we are part of the top three in the OECS . . . and we have recorded, as a country, a 3% growth rate,” Raymond added.
On the subject of debt, he stated that the country experienced a debt increase. However, the government remains optimistic. “I am proud to report, although there was an increase in the debt situation in this country, it was very marginal; in fact, the increase is actually decreasing. There’s a deceleration of the increase in our debt situation in this country. In fact, it is the very first time, from year to year, we have a debt to GDP that has actually gone down,” was the minister’s remark.
January 2017 saw a VAT reduction from 15% to 12.5%. On this Raymond offered, “I can say to you that despite the rate reduction, the government receipts are very, very healthy. In fact, when we looked at the projections of the VAT reduction from 15% to 12.5% we said, as a government, based on the projection, [we] would have actually foregone . . . approximately $52 million. The economy performed so well that we did not see a reduction in our receipts by $52 million in terms of VAT but only $27 million. It shows that the economy is very strong; the businesses, households, they are responding very positively to our tax regimes, our tax changes . . . ”
As for Saint Lucia’s future, the minister foreshadowed, “I’m expecting things to be much better when we as a government implement our foreign direct investment.”
