It is also expected that macroeconomic stability would be achieved and the groundwork for enhanced, growth and development would be laid as a result.
In his traditional New Year’s message, Prime Minister Dr. Denzil L. Douglas said the measures introduced will not only bring the Federation’s tax collections closer to regional and international norms, “but will still allow us to remain more favourable relative to the tax burden faced by taxpayers regionally and internationally.”
Dr. Douglas, who is also Minister of Finance, provided three illustrations.
“Firstly, The Value Added Tax has been in place in most countries in the world and in many Caribbean Countries for many years, but we are now just introducing it for the first time. In fact, the United Kingdom has recently increased its Value Added Tax to 20% in response to the crisis and in Barbados it has been increased to 17.5%. Secondly, notwithstanding the adjustments to our Social Services Levy, it is far less onerous than the Income Tax imposed in other Caribbean Countries and throughout the world. And thirdly, the increase in our electricity tariffs will barely bring our tariffs within the lower range of the tariffs prevailing around the Caribbean.”
He said Government will continue to review the tax collections on a continuous basis with a view towards identifying opportunities for bringing relief to residents when this is feasible.
“For instance, we are convinced that over time we would be able to reduce the electricity rates through the use of alternative sources of energy, such as geothermal energy and wind energy. Indeed, a wind energy facility is already in operation in Nevis and we have entered into an agreement for the establishment of a similar facility in St. Kitts shortly. Moreover, the plans for the production of geothermal energy in Nevis is proceeding quite smoothly and it is expected that as early as this month work will commence in earnest in respect of the establishment of the facility,” Dr. Douglas told the Nation.
He disclosed that the initiatives in relation to alternative sources of energy will not only reduce energy cost, but will significantly advance the comprehensive programme of sustainable integrated development in St. Kitts and Nevis, that can realise the goal of becoming the first completely green country in the world.