After several weeks since the conclusion of the 2012/13 Budget Presentation, the House reconvened yesterday with papers laid and bills presented. Among them was the Valued Added Tax (VAT) bill which was presented by Prime Minister Dr Kenny Anthony.
With the absence of a strong opposition in the day’s sitting—save for Opposition Leader Stephenson King and Micoud North MP Gayle Rigobert—the session began promptly with the presence of all members of the governing St Lucia Labour Party. Members for Castries South-East and Dennery South issued letters to the House indicating their absence at the sitting.
In his presentation, Dr Anthony again noted that St Lucia is the last country within the OECS to implement the new tax system. He further stated that the people of this country have reached the point where they now accept VAT to be a vital tax system that is necessary to the future of St Lucia.
He took some time to thank the previous UWP government, not in a jesting manner as was the case in another sitting but with a solemn expression on his face, he looked over at the member for Castries North and said: “As I have said on a previous occasion in this House, and in most of the Budget debate that tribute had to be paid to the former Government for the work that had been done. I know that was greeted with some amount of laughter at that time but that was not the objective but merely to say that the ground work was reasonably well prepared in the sense that the issue of VAT had been debated and explored from time to time.”
Dr Anthony also commended the VAT Office for their extra-ordinary efforts in sensitizing the public and other relevant entities about the major concerns regarding the implementation of VAT.
In just a few weeks before the Budget presentation this year, PM Anthony had announced a September 1st implementation date. Most members from the Opposition United Workers Party (UWP) questioned the preparedness of the St Lucian people for such a date saying that it was too soon and not enough will be done to get the country ready by that date.
This had set the stage for a major debate between the two parties during the Budget Presentation last month, however, in yesterday’s session, Dr Anthony announced that the September 1st date has been strategically pushed to October 1st 2012 to accommodate for a few changes.
According to the PM, the Chamber of Commerce has repeatedly questioned the readiness of the country for the September 1st date:
“Perhaps the most fundamental question is this one; ‘are we ready?’ VAT has been the most critical concern of the St Lucia Chamber of Commerce. . . Obviously what we are doing here today is critical and crucial.
“A law has to be in place and persons need to know what to expect from the law and the law will have to be explained,” he said while adding, “When we had announced prior to the Budget the date of September first, we were looking down the road and thinking of the various commitments that had to be made and we are now in a position to assess all the initiatives and all the commitments that have been made to observe the VAT in operation.
“Having considered all the factors, all the issues, concerns and anxieties of the private sector as well as our own efforts towards training and occupying the new VAT building that has been selected, the government of St Lucia has decided to postpone the implementation of VAT by one month,” said Dr Anthony.
He further indicated that over 50 new VAT officers, appointed by the Public Service Commission are currently being trained with the assistance and support of CATA which has been the agency in primarily helping St Lucia successfully implement VAT.
PM Anthony stunned a few of his colleagues when he said he hated tax. Perhaps, that would have been the last comment they were expecting to hear from him but he went on: “I hate tax. I wish we did not have to pay tax but the reality is that we cannot do without it to provide the services that are necessary. . .
“We do not have a culture in which we pay the taxes even if we do not like it. We engage in evasion and avoidance. But the State has to take some responsibility for allowing that culture to germinate, to develop and take hold of the society. “When persons do not pay taxes that are required by law, the State sometimes turns a blind eye. How else can we explain the fact that in the hotel sector for example, there are outstanding liabilities of hotel accommodation tax of EC$36 million dollars? How do we explain that?” asked Dr Anthony.
He later cautioned landlords who he claims are already notifying their tenants of an increase of VAT in their monthly rent. Dr Anthony stated that only commercial rent should include VAT and all residential property will exclude any VAT charges.
While on this matter, the PM also indicated that his Government, particularly the Ministry of Commerce and Consumer affairs will be monitoring the market for any sharp increases in the prices of goods.
He says there will be stiff penalties for price gouging and other criminal acts regarding VAT. He also said this is of major concern since the prices of certain goods (and he pointed out lentils) have soared to an all-time high without a reasonable explanation.
As he closed his presentation, Dr Anthony announced that his government has committed EC$778, 878.32 to assist small businesses in transiting to the required VAT operating software.
“There will be challenges for the small business sector and the Cabinet had directed the VAT office to explore the possibility of supplying small businesses with VAT software so that they could make the transition.
“The Minister of Finance has accepted a suggestion to provide assistance to the small business sector to the amount of EC$778, 870.32. That package will allow for the provision of VAT ready accounting software to businesses and we will be doing so at no charge. Provision of training
to staff of businesses on the use of accounting software will be again at no charge and provision of technical assistance on software usage to small businesses with training again will be at no charge.”
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