Categorized | News, Regional

St Lucia businesses call on government for VAT reduction

CASTRIES – CMC – The St. Lucia Employers Federation (SLEF) is calling on the government to lower the near one-year old Value Added Tax (VAT) so as to provide “some breathing space” to local business in the face of job losses and business closures.

“This reduction will provide members some breathing space as the slowdown in the economy continues to bite deep into their cash flows,” said SLEF executive director Joseph Alexander.

The private sector group wants the VAT reduce from 15 to 10 per cent and Alexander is also contending that should the government decide against collecting the 15 per cent VAT up front from businesses and collect the tax after they have sold their goods, employers would have the breathing space needed in the current economic downturn.

Explaining the plight of some businesses in St. Lucia, Alexander advised that most operate via an overdraft system which they have to maintain.

“Therefore having to pay the 15 percent VAT before goods have been sold plus taking care of their overdraft all at the same time impacts severely on the cash flow of businesses which become yet another reason for job losses and the closure of businesses,” Alexander said.

He said that VAT is one amongst other reasons why some businesses were going through tough times, while the slowing down of the economy is another and argues that the Kenny Anthony government should have set the VAT ceiling at 10 per cent and increase it as the economic situation improves.

“If things were booming it would not be that difficult. The 15 per cent is just too high in these harsh economic times,” he added.

The VAT went into effect on October 1 last year after the government agreed to a one month extension of the fiscal measure.

The comments from the Employer Federation on the closure of businesses and job losses here is the second in days, with the National Workers Union (NWU), one of the major trade unions here, expressing concern over the country’s failure to grasp timely opportunities to structure a plan aimed at job security and economic stabilisation.

“Over the last 24 months we at the National Worker Union have been monitoring the situation in the country, especially since the financial crisis of 2008 and we are very concerned about the direction we see the country heading as it relates to job losses, and redundancies.

“We have seen the trend via our membership and there is also evidence at the national level. So our concern is related to the future of the country and its workforce, what exactly will happen to the increasing number of persons on the breadline,” said NWU’s Deputy President General, Solace Mayers.

The union said stakeholders in the industry must come together and devise a plan to arrest the crisis before it gets any worse.

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CASTRIES – CMC – The St. Lucia Employers Federation (SLEF) is calling on the government to lower the near one-year old Value Added Tax (VAT) so as to provide “some breathing space” to local business in the face of job losses and business closures.

“This reduction will provide members some breathing space as the slowdown in the economy continues to bite deep into their cash flows,” said SLEF executive director Joseph Alexander.

The private sector group wants the VAT reduce from 15 to 10 per cent and Alexander is also contending that should the government decide against collecting the 15 per cent VAT up front from businesses and collect the tax after they have sold their goods, employers would have the breathing space needed in the current economic downturn.

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Explaining the plight of some businesses in St. Lucia, Alexander advised that most operate via an overdraft system which they have to maintain.

“Therefore having to pay the 15 percent VAT before goods have been sold plus taking care of their overdraft all at the same time impacts severely on the cash flow of businesses which become yet another reason for job losses and the closure of businesses,” Alexander said.

He said that VAT is one amongst other reasons why some businesses were going through tough times, while the slowing down of the economy is another and argues that the Kenny Anthony government should have set the VAT ceiling at 10 per cent and increase it as the economic situation improves.

“If things were booming it would not be that difficult. The 15 per cent is just too high in these harsh economic times,” he added.

The VAT went into effect on October 1 last year after the government agreed to a one month extension of the fiscal measure.

The comments from the Employer Federation on the closure of businesses and job losses here is the second in days, with the National Workers Union (NWU), one of the major trade unions here, expressing concern over the country’s failure to grasp timely opportunities to structure a plan aimed at job security and economic stabilisation.

“Over the last 24 months we at the National Worker Union have been monitoring the situation in the country, especially since the financial crisis of 2008 and we are very concerned about the direction we see the country heading as it relates to job losses, and redundancies.

“We have seen the trend via our membership and there is also evidence at the national level. So our concern is related to the future of the country and its workforce, what exactly will happen to the increasing number of persons on the breadline,” said NWU’s Deputy President General, Solace Mayers.

The union said stakeholders in the industry must come together and devise a plan to arrest the crisis before it gets any worse.