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Today’s Top Headlines

Grenada Adapts VAT Regime

by Phillip Morton, Investors

24 May 2013

The Government of Grenada has announced, in its Budget for 2013-14, comprehensive changes to the island's VAT regime, and proposals to introduce a Citizenship by Investment Program.

The Government has committed to a review of the VAT regime following lobbying from local businesses. The VAT waiver on imports, local businesses argue, places local purchases at a competitive disadvantage to imports. To address these concerns, the Government has committed to extend VAT concessions to locally-produced products.

Other legislative amendments will allow voluntary registration for VAT purposes by small businesses from January 2014.

In addition, the Government intends to cut the VAT rate on construction sector inputs, from May 1, 2013, until December 31, 2014, on sand; cement; roofing materials; steel; lumber; and construction blocks. Furthermore, construction services rendered for projects valued at less than XCD400,000 (USD148,000) until December 31, 2014, will be exempt from VAT.

The Government has also replaced the Manufacturers Rebate with the Manufacturers Competitiveness Program, providing for a tax rebate of 5 percent of VAT-exclusive sales for qualified manufacturers, effective from May 1, 2013.

Other proposals raised in the Budget include the establishment of a Citizenship by Investment Program, which the Government has said will mirror similar regimes in place in other Caribbean territories. The program will be developed for launch in June 2013, the Government said.

Lastly, in the second half of 2013, Grenada will launch new e-taxation services, allowing taxpayers to register for tax purposes and obtain a Tax Identification Number online, and file their monthly and annual returns electronically.

TAGS: Citizenship | tax | small business | business | value added tax (VAT) | international financial centres (IFC) | Grenada | offshore | legislation | construction | regulation | services

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