The Government of St. Kitts and Nevis has released a white paper for public consultation on its intention to introduce Value Added Tax (VAT) in 2010.

On April 21st the Government of St. Kitts and Nevis released a detailed white paper outlining its full intention to replace a number of existing national taxes with a single unified VAT. The paper, which received Cabinet approval on April 19th, is intended to familiarize national taxpayers with the proposed rules. The white paper also signals the beginning of a 30 day consultation process on the suggested VAT system. Pending submissions for changes to the proposed VAT rules, two more readings of the paper will be held with corresponding consultations, followed by a final publication and passage into law. The St. Kitts and Nevis Government has made clear its intentions to ratify the VAT system in November 2010.

The paper revealed that the VAT system will replace the current Consumption Tax, Hotel and Restaurant Tax, Cable TV Tax, Vehicle and Rental Levy, Insurance Premium Tax, Export Duty, Public Entertainment Tax, Lotteries Tax, Gaming Machine Tax, Traders Tax, Parcel Tax and the Telecommunications Levy. The new VAT system will charge a standard rate across all imports, business-to-business and business-to-consumer transactions, along with Government transactions. Although, the Government has proposed that exemptions be made for certain foods, goods and services for export, fuel, commercial property sales, improvement of land services, selected medicines, along with a number of other imports and services considered imperative by the Government.

It was stated that the Government sees the VAT system as an opportunity to carry out a positive tax reform for improved efficiency and simplicity. The paper carried on to say that the Government actively welcomes the support and suggestions of national tax payers, in order to successfully carry out the reforms.

Photo by J. Stephen Conn