IMF Praises Tax Reforms In Caribbean Region
by Mike Godfrey, Lowtax.net, Washington
28 October, 2016
The IMF has released a report that takes stock of the recent work of the Caribbean Regional Technical Assistance Center, which has supported Caribbean territories to improve their tax regimes since 2001.
In its "2016 Discussion on Common Policies of Member Countries of the Eastern Caribbean Currency Union," the IMF outlined the measures some territories are taking, with CARTAC's help, to further their tax reform agendas, improve institutional arrangements, and ease compliance.
It notes that Saint Lucia has reviewed its corporate income tax regime and a presumptive tax has been designed for implementation in the 2017 fiscal year. It also increased its value-added tax (VAT) threshold to ECB400,000 (USD148,148) effective February 1, 2016.
Dominica has reviewed its corporate income tax regime and a presumptive tax has been designed. An increase in the VAT threshold has also been proposed.
CARTAC has supported Grenada on tax incentive reform, which is currently being implemented.
CARTAC has provided advice to Anguilla following its budget announcement regarding the implementation of comprehensive fiscal reform, including the introduction of a broad-based Goods and Services Tax. CARTAC provided advice and recommendations on indirect taxation, and other options to improve the taxation of goods and services.
CARTAC has provided advice to Saint Kitts and Nevis on implementing and managing a tax incentive regime, and to Saint Lucia and Dominica on revenue modeling to enhance tax policy reforms.
A model Tax Administration Procedure Act (TAPA) has been drafted for the region to improve tax administrative effectiveness. Legislation has been enacted in Grenada (effective May 2016), and while Antigua and Barbuda has enacted a TAPA, its implementation is delayed. Recommendations have also been made for Saint Vincent and the Grenadines to similarly adopt an Act.
CARTAC has acknowledged the considerable progress made throughout the region to implement value-added taxes, with VAT regimes now operating in Dominica (March 2006), Antigua and Barbuda (January 2007), Saint Vincent and the Grenadines (May 2007), Grenada (February 2010), St. Kitts and Nevis (November 2010), and Saint Lucia (October 2012). Anguilla is expected to introduce a VAT next year.
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