Saint Kitts And Nevis Committed To Deficit Reduction

by Amanda Banks, Tax-News.com, London

10 October 2011

Amid pressure to rapidly reduce the territory's debt, Denzil Douglas, the Prime Minister of Saint Kitts and Nevis has reassured taxpayers that the government's decision to reduce the rate of stamp tax payable on transfers of land or property will not result in a loss of revenue for the government.

The government's decision to reduce the rate of stamp duty payable by the vendor or transferor in respect of conveyances or transfers of land or property to 12% is to assist local developers, Douglas explained in a radio broadcast. “By bringing the tax from 18.5% to 12%, it levels the playing field for [the developers] and nothing will be lost. It will also spur additional investment opportunities and thus will increase the revenue that we would have obtained.”

“We will not in any way lose any revenue; instead it will enhance our ability to close the fiscal deficit which is important as part of the programme for growth and development of the local economy,” Douglas said, noting that new construction projects will boost employment.

The government is under increased scrutiny as it sets about implementing a deep fiscal retrenchment programme, and has introduced a number of tax measures, including a value-added tax regime, excise tax reforms, a review of import duty exemptions, and an environmental levy on new vehicles. The International Monetary Fund has said that authorities will have to ramp up their efforts for the territory to cut its deficit.

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