St Kitts And Nevis VAT Bill Presented

by Phillip Morton, Investors Offshore.com

09 August 2010

The government of St. Kitts and Nevis has announced that governing legislation for the implementation of a value-added tax regime in the two-island federation has been tabled in parliament for final approval, a crucial step ahead of the tax's proposed introduction in November.

“After several weeks of public discussion, parliamentary debate on the draft value-added tax Bill, 2010 [began] in the St. Kitts and Nevis National Assembly on August 6,” the government said.

According to the government, the 150-page document is to be subject to its second reading this week, with submissions expected from private sector organizations and social bodies before a final text is agreed.

The adoption of the VAT bill is a part of the government’s reform of the federation’s tax regime. The introduction of a VAT is a major development, which will significantly streamline the islands’ tax system, consolidating 12 existing taxes: the Consumption Tax, the Hotel and Restaurant Tax, the Cable TV Tax, the Vehicle Rental Levy, the Insurance Premium Tax, the Export Duty, the Public Entertainment Tax, the Lotteries Tax, the Gaming Machine Tax, the Traders Tax, the Telecommunications Levy, and the Parcel Tax.

In earlier announcements, the government indicated that the VAT would be implemented broadly, at a rate of around 20%, with exemptions for a range of basic goods and services including: interest and loan payments; some medicines for chronic diseases; bus fees; residential rent; local farmers’ produce; fuels such as gasoline, diesel, cooking gas and kerosene; articles specific to disabled persons; printed reading material; and some imported food.

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