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St. Lucia delays VAT implementation for hoteliers

Published:Monday | October 8, 2012 | 12:00 AM

Three days after the Value Added Tax (VAT) came into force in St. Lucia, cracks have began to appear with Prime Minister Dr. Kenny Anthony announcing a delay in the implementation of full VAT for the hotels and related services in the tourism sector.

In a statement which appears to give credence to opposition claims that the government was ill prepared for its implementation, Prime Minister Anthony, who is also Finance Minister, said the delay was due to parliamentary procedures that are required before the order setting the VAT rate comes into force.

Parliament met last week to make adjustments to accommodate the introduction of the VAT on October 1, amid opposition calls that the process was being rushed and should not be implemented at a time when the economy was in dire straits.

Prime Minister Anthony said that a section of the legislation which allows for the rate of VAT for the hotel sector was amended at the last sitting of Parliament, but this amendment had to come into force before the order setting the rate of the VAT can take effect.

This means that parliament must approve the order before it takes effect, and presumably this procedure is intended to ensure greater parliamentary scrutiny and accountability. What this means is that a parliamentary debate can now take place on the rate of VAT for the hotel and tourism sector, Anthony noted.

Opposition Leader Stephenson King has reiterated that citizens, already reeling under a series of severe economic hardships, are now having to contend with the VAT by a stubborn and insensitive Prime Minister who refuses to heed the call of St Lucians to forego the harsh realities of the new taxation measure at this time.

King said that despite numerous calls from sections of the private sector, hoteliers, financial consultants and the general population for the government to postpone the VAT, Anthony has not listened.