St. Kitts And Nevis Should Broaden Tax Base Says IMF
by Mike Godfrey, Lowtax.net, Washington
15 May, 2017
In its latest report for the territory, the International Monetary Fund has recommended that Caribbean territory Saint Kitts and Nevis change focus to reviewing the tax incentives it offers.
Saint Kitts and Nevis has made substantial progress on improving the state of its finances, must significantly by introducing a value-added tax. However, the IMF said that the territory loses revenues worth 6.4 percent of gross domestic product as a result of tax breaks.
On the indirect tax front, the IMF says value-added tax and import-duty exemptions since 2014 have weakened the territory's fiscal framework. While large fiscal buffers have been accumulated, it said a sharp fall in citizenship investor program inflows could erode the territory's fiscal position as early as 2020 and further weaken tax performance.
It recommended streamlining tax incentives and improving their administration. It said they should be "transparent, rule-based, and well-targeted."
The IMF added that the territory could boost revenues by updating property valuations, enhancing compliance, and imposing other taxes, including those on cigarettes, alcohol, and sugary products.
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