Government aims to reduce the tax burden on the population while making the tax system more investment friendly.

Prime Minister Hon. Allen M. Chastanet has announced that there will be a reduction  in the standard rate of value added tax (VAT).

In a Nov. 7 address to the nation, the Prime Minister announced that effective Feb. 1, 2017, the standard rate of VAT will be lowered from 15 percent to 12.5 percent, resulting in an estimated $52.5 million a year pumped back into the hands of the people.

"We will continue to review the current tax regime and guarantee you that the overall objective of the government’s tax policy is to grow the economy," he said. "The goal is to reduce the tax burden on the population while making the tax system more business and investment friendly, and most critically ensuring fiscal sustainability.”

The Prime Minister also commented on the reintroduction of the Airport Redevelopment Charge.

“Saint Lucia previously had this charge which had no effect on our tourism arrivals. In fact, if we had kept this charge we would have collected in excess of $200 million, which is half of the monies needed to build the new airport. During our review we found that most of the other Caribbean countries charge about US$100. In essence, Saint Lucia has been foregoing US$75 per passenger or EC$100 million in revenue a year. Reintroducing this charge will also be less onerous on the citizens of this country and will significantly contribute to decreasing our national debt as a percentage of the monies raised will be allocated to a sinking fund. This is additional revenue that will be set aside so Saint Lucia can begin to take care of itself,” he said.

The Airport Redevelopment Charge will be re-implemented in April 2017.