The St Lucia government on Wednesday moved to avert a shutdown of the vital tourism industry, informing hotel workers that they will not be asked to pay Value Added Tax (VAT) on service charges.
"The Government of St Lucia wishes to reassure workers throughout the hotel industry that the service charge earned by workers will not attract VAT," said the Kenny Anthony government of the tax measure that goes into effect on October 1.
Last week, the National Workers Union threatened to shut down the hotel sector if the tax was not removed.
NWU president Tyronne Maynard said that putting VAT on service charges would have had a devastating economic impact on the hotel and tourism workers, who rely on the charge to improve their wages.
The St Lucia Hotel and Tourism Association said it was seeking a meeting with the union to discuss the matter.