Dominica Slashes Tax Rates In 2014/15 Budget
by Jason Gorringe, Lowtax.net, London
31 July, 2014
Caribbean territory Dominica has announced that it is to overhaul fiscal incentives to attract foreign investment, and plans to cut the territory's corporate income tax by five percent and introduce corporate tax breaks for companies increasing their headcount.
The corporate tax will fall to 25 percent from 30 percent over a two-year period beginning in 2015.
The budget also proposed to raise the tax-exempt personal allowance from XCD20,000 to XCD25,000 from January 1, 2015, and the mortgage allowance will increase from XCD15,000 to XCD25,000.
A new "di minimis" system for the administration of customs duties is to come into effect from August 1, 2014. This will exempt from tax and administrative requirements goods imported worth up to XCD150, excluding commercial goods, tobacco products, and alcohol.
VAT is to be cut on hotel rooms and diving activities to 10 percent, while food and drink sold by hotels will continue to face a 15 percent rate. Hotel service charges will be newly exempt. The five percent import duty and three percent service charge on the importation of computers are to be removed. The Government said this is to support the introduction of e-filing, and will result in the imposition only of VAT and environmental tax on computer imports.
A corporate tax rebate is proposed for companies that create new jobs, and existing tax incentives aimed at attracting foreign investment are to be reviewed by a Government-appointed working group. The territory is also considering the introduction of a flat rate of personal income tax.
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