After years of collecting an Environmental Levy on goods coming into the country, Prime Minister of St Lucia, Dr Kenny Anthony has questioned the lawfulness of the Act. The statement came on his appearance on the talk show, “News Maker Live” with Clinton Reynolds last week Wednesday.
“St Lucia over the last couple of years has been heavily criticized by Caricom because of the environmental levy. Countries such as Trinidad, Jamaica, even Guyana complain bitterly that the environmental levy was unlawful. The environmental levy was imposed on all goods coming into St Lucia and these countries were complaining that manufacturers in St Lucia use goods for the domestic market without having to pay the Environmental Levy for the goods they produce. The result was that the Environmental Levy was discriminatory. In my respectful view and in my judgment . . . if we had been held before the CCJ, we would lose,” said Anthony.
The Prime Minister’s statement came in a response to the VAT implementation that is to take full effect this September 1st. According to the PM, VAT will replace the Environmental Levy and even Consumption Tax that is currently being collected on goods entering the country.
He further explained that the Minister for Foreign Affairs together with the Minister for Commerce attended a meeting in Guyana where they explained that there are “fiscal changes on the way that will do away with the environmental levy.”
“The fact is, if St Lucia does not move quickly to deal with the environmental levy then we could well be held before the CCJ by other countries of Caricom. A similar fate has also met the security tax enacted by the former government—you would recall that last Budget statement by the then Prime Minister Stephenson King, the government imposed a security tax to make monies available for the police to carry out their functions. They delayed the tax largely because of electoral reason; they were too scared to introduce it and the opposition at the time never really criticized it because it was earmarked already.”
Dr Anthony again explained that countries within Caricom threatened to take St Lucia before the CCJ because this, according to the PM, was a similar tax as that of the Environmental Levy. He added that all of these were factored into making the decision about VAT to prevent a possible case where St Lucia would have to appear before the CCJ.
The Environmental Protection Levy Act No.15 of 1999 was amended in 2002. It imposed a tax on most imports, but did not apply to domestically produced goods. Specific rates were set for motor vehicles, tires, used refrigerators and freezers, and batteries. The Act further added a general rate of 1.5 percent on the c.i.f. value of goods in containers of plastic, glass, metal, or paperboard, and on empty containers made of those materials. All other imports, except for clothing, footwear, foodstuffs, and pharmaceuticals, were subject to a rate of one percent.
The 1997-2006 Kenny Anthony administration had announced in the 2002 Budget presentation that the Environmental Levy cost of used vehicles will increase between $1000 and $12,000 depending on the age of the car.
The new measures were announced by Dr Anthony in response to what he said were, “serious under-invoicing” by used car dealers in their customs declarations. At that time, the then Prime Minister said he hoped the new levy would help to compensate for the substantial drop in government revenue from used car imports but had failed to inform the public that there was the possibility that this “Levy” could be illegal.
At the time, the largest used car dealer in St Lucia, Thomas Roserie responded quickly to the PM’s announcement saying, “the government had declared war against the people of St Lucia.” He would go on to say; “. . . the new measures were designed to make life more difficult for used car dealers.
Roserie claimed the government had conspired with new car dealers to give them an unfair advantage, an allegation that was almost immediately dismissed by Dr Anthony. Further, Dr Anthony would let it be known that the allegations were nothing more than “excesses to be ignored” and “undiplomatic outbursts” which should be treated with “generosity.”
The PM said the problem of used cars was not unique to St Lucia only but several Caribbean islands had taken steps to ban the importation of used cars and others had imposed stringent restrictions to discourage the trade.
Thomas Roserie has drastically reduced on importation of used vehicles but according to customs’ statistics, used vehicles entering the country have not declined as the readily accessible Internet and Debit Cards have allowed many private citizens the privilege of importing used vehicles from Japan regardless of the Environmental Levy Act.
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