St. Lucia: Manufacturers calling for reform of Value Added Tax structure

Manufacturers in St. Lucia have urged the government to re-examine issued related the Value Added Tax (VAT) that was introduced one year ago.

The manufacturers state that with empirical data and stakeholder feedback now available, the government is in a position to make the necessary revisions to help deliver stability, jobs and economic growth.

According to the President of the St. Lucia Manufacturers Association, Paula Calderon, one year after the implementation of the tax, manufacturers continue to be plagued by policy and implementation issues that threaten their very survival and negatively impact on the economy.

Ms. Calderon has indicated that the requirement to pay the tax upfront on imported raw and packaging materials, plant, tools, equipment and other supplies has adversely impacted the cash flow of many manufacturers.

“This is exacerbated by the fact that the refund process has been slow and cumbersome, resulting in a scenario in which many manufacturers have not been refunded since the inception of Value Added Tax.”

The manufacturers association claims that with diminished cash flow, businesses are finding it difficult to meet their commitments, resulting in disrupted operations that impact both staff and consumers.

Both the St. Lucia Employers Federation and the St. Lucia Chamber of Commerce have called for a reduction of the tax, down from the 15 percent introduced by government.