Lowtax Network

Back To Top

IMF Suggests Improvements To St Kitts VAT Regime

by Mike Godfrey, Lowtax.net, Washington
06 October, 2014

The International Monetary Fund has provided a progress update and suggested a few further reforms following the introduction of a value-added tax in Saint Kitts and Nevis in November 2010.

In 2009, St Kitts and Nevis was one of the world's most indebted economies, with its public debt at 185 percent of gross domestic product (GDP). Following the implementation of value-added tax, considerable tax reform, and debt restructuring, the territory's public debt-to-GDP ratio has fallen into double figures. These measures were implemented under a program with the IMF, the report for the final review of which has now been released.

In the report, the IMF said that there had been a moderate increase in tax revenues, reflecting reforms to improve tax administration and to repeal transitory VAT arrangements, including the temporary VAT and customs duty exemptions on construction materials from the end of 2013. Further, a cap was set on the value of exemptions at XCD100m for 2014, down from XCD122m in 2012.

The Fund recommended that if the fiscal position for Saint Kitts and Nevis continues to improve, the Government should not succumb to calls for value-added tax breaks or for a reduction in the VAT rate, with the VAT said to have played a key role in establishing a sustainable fiscal regime.

It was noted that authorities in the territory are continuing to revise tax administration legislation to harmonize the Tax Administration Procedures Act with the VAT Act. Other initiatives undertaken recently have included establishing a unit in the Inland Revenue Department in September 2013 that is dedicated to the design, planning. and monitoring of tax compliance efforts. In December 2013, the tax authority established a Large and Medium Taxpayer Unit, and more recently the territory has also launched an e-filing program to facilitate and enhance tax filing procedures.

See all of today's news


News Archive

Event Listings

Listings for the leading worldwide conferences and events in accounting, investment, banking and finance, transfer pricing, corporate taxation and more...
See Event Listings »