The regulations for the Travel Tax, the Value Added Tax (VAT) and Customs amendments were affirmed in the early morning hours of Friday in the National Assembly.
The Minister of Finance, Winston Jordan moved the motions. The Tax Regulations 2016 support the increase of the travel tax from $2,500 to $3,500. “The overall travel tax is still very small compared to a number of countries in CARICOM and around the world,” Minister Jordan pointed out.
Minister of Finance, Winston Jordan
Moving the motion on the VAT Tax (Amendment) Regulations 2016, Minister Jordan explained this regulation will see the 16 percent VAT currently being charged being reduced to 14 percent. The regulation will also make amends to the VAT threshold from $10M to $15M. This move removes a number of companies from registering for VAT, Minister Jordan pointed out.
The amended VAT regulation will also see electricity and water being zero rated and attracting 14 percent VAT in excess of $10,000 and $1,500 respectively. “I want to say the reason we had to do what VAT is… VAT contribution to revenues was going down,” Minister Jordan said in justification of the amendments.
The minister noted that VAT’s overall contribution to revenue intake had reduced to 24 percent with 2008 netting the highest contribution of 30.4 percent.
Meanwhile,Opposition Chief Whip Gail Teixeira moved a motion to amend the VAT regulation to remove the VAT from electricity and water supply but that motion was voted down by the government side of the House.
The third regulation which received affirmation in the House was the Confirmation of the Customs (Amendment of Schedules) Order 2016. “This Order is intended to give effect to a number of measures outlined in the budget,” Minister Jordan explained.
Those measures include 15 percent Customs duty on new tyres instead of the existing 30 percent while used tyres will be restricted from April 1.
Exemptions on Customs duties for items used in construction of water treatment and water recycling facilities among other green equipment are also covered in this Order among other