St Lucia Introduces VAT on Certain Tourism Services

As St. Lucians await the presentation of the 2014-15 national budget, providers within the tourism sector, will from this month, pay a 10 per cent Value Added Tax (VAT) on some services initially exempted from the fiscal measure.

Government introduced the VAT in October 2012 and St Lucia became the last member state in the Caribbean Community (CARICOM) single market to introduce the  tax that replaced a raft of taxes and duties. St Lucia’s VAT is to be levied at 15 per cent on goods and services and at eight per cent in hotels.

According to a VAT (Rate of Tax) amendment order issued by the government, the 10 per cent tax would be imposed on accommodation services by hotels and their supply of food and beverages as well as for services such as tours, excursions and rides with local aerial trams and zip lines; hair braiding and massages.

Director of Tourism Louis Lewis said the tax would help fund improvements in the sector.

“At the end of the day, the government spends tremendous amounts of resources in marketing the destination; there are a number of beneficiaries.

"The entire country benefits and I think what the extension of the VAT to those tourism services allows for greater access of resources to be able to continue to promote the destination,” Lewis said.

“We have to look at it from a point of equity. For instance, your income is taxed, my income is also taxed. If you’re working in St. Lucia and you’re providing a service, it’s only fair that you make a contribution," he said.

Lewis added that some of the beneficiaries of the tourism industry by virtue of them paying taxes are actually making a contribution towards the promotion of the destination which comes back to benefit them in return.

Source: caribbean360.com