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St Lucia Adopts VAT

by Amanda Banks,, London

31 July 2012

The Caribbean territory of Saint Lucia has begun educating local businesses ahead of the confirmed introduction of a value-added tax (VAT) regime from October 2012, following the Senate's endorsement of the VAT Act.

Previously, the island was the only independent territory in the Caribbean Community (CARICOM) that had yet to introduce a value-added tax. With a headline rate of 15%, St Lucia's VAT regime will be comparatively less punitive than in other CARICOM territories. Presently only Haiti and Belize have lower headline rates at 10% and 12.5%, respectively, although the Turks and Caicos Islands is due to introduce an 11% regime from April 2013. The government of Saint Lucia has however agreed a concessionary rate of 8% for the hotel industry.

Under the regime, from October 1, 2012, businesses with annual taxable revenue of XCD180,000 (USD66,000) will be required to be registered and begin collecting VAT. Training programmes to support implementation have been planned for two months starting at the end of July. A number of food items are to be exempt under the regime, and the government is planning to remove import duties on pharmaceuticals to offset the impact of VAT, subject to approval from CARICOM.

TAGS: tax | business | value added tax (VAT) | Saint Lucia | law | food | legislation | tax rates

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