Gov’t moves to increase VAT threshold

By SNO Staff

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VATThe Government of Saint Lucia has taken the decision to increase the Value Added Tax (VAT) threshold from $180,000 to $400,000 with the aim of providing greater incentives for the expansion of small business on the island.

This new measure will be introduced with the passing of Value Added Tax (Amendment) Bill 2016, which was tabled in the National Assembly on Tuesday, January 12, 2016.

Prime Minister Dr. Kenny Anthony said it represents a more realistic measure of equity of taxpayers, and provides more breathing space for the small businessman.

“It therefore means that a number of small businesses don’t have to register for the VAT or if they are currently register can now deregister,” he explained.

Dr. Anthony told members of the House that there are some persons who would prefer to continue their registration under VAT, because they would want to claim the input of VAT into whatever goods and services they offer.

Meanwhile, Castries Central MP Richard Frederick said there is a misconception that VAT collection is a manner to unjustly enrich one’s self, explaining that it is essentially collecting money on behalf of the government.

“So when persons make noise that they are not registered, they believe they will collect the VAT and never pay up to government,” Frederick told the House.

Government has said it raked in over $220,000 increase in the VAT threshold in May 2015.

Over 600 VAT registrants will not be required to collect tax on behalf of the government.

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12 comments

  1. Bug you got it right. Who Kenny think he fooling How does this help small business. It actually works in the Governments favour. I will tell you how later down in this blog. When the threshold is increased less businesses, although they remove the burden of VAT collection, Accounting, etc, are now less able to sell to VAT registered companies who prefer to trade with other VAT registered companies so that they can net off the payments.

    Remember also.......... those small businesses who the Government just increased the threshold for still have to purchase from VAT registered wholesalers and other service providers. With them now joining the Non-Vat businesses they are not going to be able to pass the VAT they paid to their customers and may have to discount to stay competitive (Good luck to you)

    Lastly the threshold increase reduces Government having to refund VAT as less businesses will be colecting although they pay , and this must be KENNYS real reason for the threshold increase. Wake up St Lucians he dont want to pass on any relief to you the final consumer. With CIP coming and the expected windfall they should do away with personal tax forever( 500 passports @ US$300,000= US$150,000 EC$4005,000,000) Mr PM after all man GIVE US A CHANCE ABOLISH TAX

    (8)(0)
  2. Yall ppl who do not have businesses should shut the hell up as yall have no idea what a VAT threshold is or what effect it has on small business.! Yall surely dont speak for us who own businesses!...since when that's yall role?
    For uwp operatives like H5D. You have no idea what you're talking about. The wishful thinking is seeing Chastanet as Prime Minister . Let's say you went to bed too early and had a nightmare...now go back to sleep!

    (1)(1)
  3. How is this going to help small businesses? Why not increase the rate of VAT on hotels, alcohol and cigarettes. This move will further cripple SME.

    (5)(2)
  4. Smh. Kenny always have a pln in store to win a election. There are more suprises to come

    (8)(0)
  5. This has been the plight of the business community from the beginning. The so called proud government has noticed that in order to jump start the economy this is one of the strategies they can play out before elections..........Good luck Kenny however much too late. Too many business have gone under as a result.
    I predict vat will be lowered also from 15% to 12% to 10%....Just saying

    (4)(1)
  6. I'm not sure exactly how increasing the threshold helps small businesses. If I interpret the concept of a VAT accurately, then it would be better for all businesses, regardless of size, to be registered and in so doing acquire the capacity to be reimbursed for their VAT purchases. Although, such an eventuality would most likely create an administrative and regulatory 'nightmare' for the government and its tax authorities.

    After researching the merits and demerits of a VAT, I believe that such a regime would better fit more developed economic structures, with solid manufacturing capabilities and a well resourced and efficiently functioning tax administration system. A small island developing state, like ours, which depends primarily on Tourism and related service industries, would likely experience more benefit from the imposition of flat-rated import and retail sales tax structure.. just thinking

    (8)(0)
  7. Politics give them back what you collected

    (3)(0)
  8. Very good. Hope more incentives will come.

    (1)(2)
  9. The public, including John Doe and Joe Blow, need to somehow be made aware of those Companies or Business Places which ought to "deregister" on the basis that they no longer fall within the increased threshold bracket. Otherwise, the unsuspecting consumers will continue to pay VAT to them, as they proceed with business as usual on the pretense that they are continuing to collect VAT for the Government, while they are in fact becoming "unjustly enriched."

    (15)(1)
  10. Choops. It's not like they taking tax payers money to help the country.These bobolis taking it all for themselves. I mean all that tax you taking and the country is not moving forward? It's just sad.

    (5)(1)
  11. This whole publicity stunt is intentioned just to try to recast the image of the SLP. There is nothing realistic or strategic about this. It is is just a tactical political sleight of hand. Our entire troupe of clowns does not understand taxation. That is the real problem here.

    Nobody within the party itself has any but the slightest knowledge of the impact of taxation on the productive sectors of our economy. That is why one week we have the SLP talking optimism on expectations based entirely on nothingness. That has become real religion in the SLP.

    The next week SLP is reducing revenue collection, based on the same emptiness of a disemboweled business sector. What is the net effect of all this?

    Oh dear, the Emperor has no clothes!

    (44)(1)
  12. "Small businesses can now De-Register off VAT" .... WTH !!! Kenny boy I really don't know what's going on in that brain of yours, but I guess wishful thinking is measure that can be taken when there is no other plans of getting over the wall. Kenny Good luck to you on elections day cause you're gonna need it. People I know it's early but I guess we can safely say when Allen becomes prime minister he will indeed have to reverse all this crap this guy is doing which will inevitably cripple and is already doing damage to the country. This is the worst St Lucia has ever been, "EVER" !!!

    (9)(31)

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