Grenada's VAT Consultation Process Gets Underway

by Amanda Banks, Tax-News.com, London

24 March 2004

The Grenadian Cabinet has had its first briefing on the likely introduction of a Value Added Tax (VAT) in the jurisdiction, part of the government's plan to seek alternative sources of revenue following the dismantling of tariffs and import levies with the coming of Caribbean trade liberalisation.

The presentation was made by Senior Finance Ministry officials and members of the Caribbean Regional Technical Assistance Centre (CARTAC), and represents the first of many such seminars to be held with various interest groups in the coming months.

The next briefing is scheduled for April, and will involve tax officials from the Inland Revenue Department and the Department of Customs & Excise.

Delivering the government’s 2004 budget last month, Minister of Finance, Anthony Boatswain remarked upon the pressing need for the country to undergo fundamental tax reform. He observed that the process of trade liberalization means lower and fewer import duties, with the ultimate aim being to “eliminate them altogether”.

“This process will lead to an eventual loss of government revenue from custom duties and taxes thus undermining Government’s fiscal regime,” he noted.

As a result, Mr Boatswain announced the establishment a special unit within the Ministry of Finance to coordinate the tax reform process, with a view to introducing a VAT-style transaction tax.

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