No New Taxes in St Kitts and Nevis

December 15, 2011 Taxation in St. Kitts and Nevis

Taxes in St Kitts and NevisBASSETERRE – Taxpayers in St Kitts and Nevis have been promised that no new taxes will be instated for at least another year, but the levels of tax compliance in the country will have to rise.

On December 14th the Prime Minister of St Kitts and Nevis Denzil Douglas presented the government budget for 2012, saying that no new taxes will be introduced in the new fiscal year despite numerous requests from the opposition parties to introduce extra tax measures.

The Prime Minister explained that the government will not look at instating new taxes before reducing public spending and removing any inefficient tax exemptions. As an example, Denzil Douglas pointed to the currently available subsidy on liquid petroleum gas (LPG), which will be phased out over the course of 2012, as it currently costs the government XCD 4 million per year. During 2012 the government will assess the viability and appropriateness of each tax exemption and subsidy that is currently offered to taxpayers. According to estimates in the new budget, the government currently spends XCD 110 million per year on tax subsidies.

The government will also look into means of improving the levels of compliance and payment of value added tax, with particular attention paid to operators in the tourism sector, which is currently rampant with tax evasion and unreported incomes.

The new budget outlines a series of significant cuts to government expenditure. Although, the Prime Minister maintained that funding priority will still be given to education, health care, and national security. Denzil Douglas said that the new budget has been carefully balanced to ensure that the scope or quality of government services does not fall.

Photo by J. Stephen Conn