The Saint Lucia Chamber of Commerce membership had some major questions for Minister in the Minister of Finance Honourable Dr. Ubaldus Raymond after he addressed the Annual General Meeting on Wednesday, November 16 at the Royal St. Lucian Hotel. Held under the theme “Making it Easier to Do Business” members of The Chamber of Commerce, Industry and Agriculture listened intently as Senator Raymond delivered an address entitled: “Spurring Sustainable Economic Growth through Accelerated Private Sector Relief.”
As the feature speaker of the day, Dr. Raymond opined on Government plans to help stimulate economic expansion. His focus was on how over-taxation has stymied growth and the way forward for private and public sector partnerships in that regard. The Minister gave the diverse group an overview of the status of Saint Lucia’s economy and some insight into the recently released Caribbean Development Bank report on Fiscal and Structural reforms for Saint Lucia.
“The Caribbean Development Bank report confirms that Saint Lucia’s public finances are on an unsustainable path. Sub-optimal economic growth performances, coupled with the relatively high cost of borrowing and primary deficits, have conspired to place our indebtedness on an upward path,” he noted.
Dr Raymond spoke of some of the various tax relief measures which government has already spearheaded including tax amnesties and the 2.5 percent reduction in Value Added Tax will be effected in February 2017.
“Value Added Tax has done little to change our lives for the better in Saint Lucia. What we have learned from our preliminary reports is that the current VAT system is a burden for the private sector as well as the public sector for a variety of reasons.”
Among the reasons, the Minister noted were the delays in receiving VAT repayments, the time of payment, the significant increase in burden imposed on exempt sellers and the cash flow problems it created for business when importing.
“The relevant Government departments also face major administrative challenges with the broad exemptions. In a 2015 review the International Monetary Fund concluded that Saint Lucia’s VAT system achieves the lowest performance across the Eastern Caribbean Currency Union.”
The Minister articulated to the Chamber that the review process of Saint Lucia’s tax system is ongoing and early next year the Government will roll out its plans for implementing less onerous taxes and also on improving the efficiency of the system.
He noted: “We need to get our fiscal house in order.” The Minister also touched on other Government initiatives including in the areas of tourism, unemployment, public sector reform and proposed projects.
Dr. Raymond closed by speaking to issues in the financial services sector, mainly de-risking and correspondent banking as well as the impending impact of Saint Lucia’s high level of Non-Performing Loans. He spoke of efforts by Prime Minister Honourable Allen Chastanet along with other Prime Ministers in the region to address these matters at the highest levels. The Minister called on the private sector for support with the decisions and developmental plans which lie ahead.