By Caribbean News Global 
RODNEY BAY, St Lucia – The Government of Saint Lucia (GOSL) issued an Extraordinary Issue of the GOSL Gazette, [July 12, 2024] the weekend of St Lucia Carnival 2024 – Statutory Instrument No.108 of 2024 – Health and Citizen Security Levy (Variation of Levy) Order, for the Rodney Bay City Center Project.
“In exercise of the power conferred under section 16 of the Health and Citizen Security Levy Act, No. 16 of 2023, Cabinet makes this order to – Variation of Rate of Levy,” GOSL.
By this action, GOSL “is varied from two point five percent to zero percent,” – in the collection of taxes – “Without prejudice to sections 4 and 9 of the Health and Citizen Security Levy Act, No. 16 of 2023” – “for the Rodney Bay City Center Project.”
The variation of rate of levy made July 11, 2024, under the hand of cabinet secretary Agosta Degazon did not formally state the duration of the said Order.
In addition, the GOSL is yet to quantify the value of – variation of rate of levy – foregone revenue relative to the 2024-2025 budget.
The common squabble to “construction jobs” and “related spinoffs,” and the creation of employment, and the purchase of [local] construction materials; and that upon completion “ jobs” will be created and “economic activity” will enhance tax collections, have the characteristics in finance, of the greater fool theory.
This also calls for clarification on the framework that “protects tax revenue and stabilizes government revenue demands,” pursuant to projected collections from the Health and Citizen Security Levy (HCSL), $35.4 million, designed to finance in part, rising healthcare costs and the security needs of Saint Lucia.
“Direct government expenses on Health and Security $275 million for the fiscal year 2023/2024. ~ Estimates of Revenue and Expenditure, 2024 – 2025.
Health and security levy not a VAT, says St Lucia government officials
Related: Health-and-Citizen-Security-Levy
Security Levy Act, No. 16 of 2023 – sections 4 and 9
“Rate of levy on goods on goods 4. Subject to section 16, the rate of the levy is two point five per cent ad valorem on the cost, insurance and freight value of the goods.
“Rate of levy on services 9. Subject to section 16, the rate of the levy on services provided in Saint Lucia is two point five per cent ad valorem on the consideration for the service.”
Residents, entrepreneurs, and other business entities – do not share the waiver privilege of 2.5 percent on goods and services, struggling to make ends meet.
The cries and tribulations in the health and security of Saint Lucia remain a perennial manifestation of the lack of leadership and outright incompetence. Conversely, residents are yet to benefit from the HCSL derivatives in the “investment in our community, our country – our people.”
Republic Bank breaks ground on Rodney Bay City Centre Investment Project
On Sunday, April 21, 2024, Republic Bank (EC) Limited (RBEC) turned the sod on the Rodney Bay City Centre development at Pope’s Hill, Gros Islet.
- The 14-acre project financed by Republic Bank is being developed by Blue Investment Ltd., a subsidiary of Domhad Properties Ltd. The development will comprise five multi-story buildings and incorporates commercial, retail, residential and recreational spaces.
- The first phase will be the home of RBEC regional headquarters and a new Rodney Bay Branch for the bank’s Saint Lucian customers. Construction on Phase 1 of the development is scheduled for completion in December 2025.
St Lucia’s 2.5 percent health and security levy is an investment, says OPM
On August 2, 2023, the government of Saint Lucia introduced a Health and Citizen Security Levy, (HCSL) for two years, noted Inland Revenue Department, (IRD).
The Health and Citizen Security Levy will be implemented with the following rates:
- On services: A 2.5 percent levy will be applied on the final service price for services provided within Saint Lucia, including applicable taxes on the supply of the service.
- On goods: A 2.5 percent levy will be added to the cost, insurance, and freight value of imported goods. This levy will be payable to the Comptroller of Customs on imported goods.
“The government of Saint Lucia remains committed to fostering an environment conducive to economic growth and prosperity, and the introduction of the Health and Citizen Security Levy is a significant measure in this direction,” IRD added.
Related: Extraordinary Gazette Friday 12th July, 2024
Variation of rate of levy
“Without prejudice to sections 4 and 9 of the Health and Citizen Security Levy Act, No. 16 of 2023, the rate of levy on goods and services provided by consultants, contractors, sub-contractors, suppliers and utility companies to Rodney Bay City Center Ltd. and the contractors of Rodney Bay City Center Ltd. for the Rodney Bay City Center Project, an approved development which comprises the construction of a luxury touristic, residential and commercial complex, is varied from two point five percent to zero percent,” Extraordinary Issue of the GOSL Gazette.
The granting of subsidies, exemptions, and tax amnesty programme [by whatever definition) are not new to controversies in Saint Lucia. But perhaps, one can concur with the expression of truths considering one’s observation, training, and understanding of fiscal incentives.
However, the exception should be to the benefit of the country in totality to the priorities of its development, administered with equality and justification, and communicated in a transparent method.
In recent history, the said waiver of EC$24 million in withholding taxes to a hotel chain caused alarm, disquiet and inquiry.
There was an atmosphere of fierce opposition to questionable practices and perhaps schematics, at the behest of the political, governance and corporate elites, that threatened broad-based development in Saint Lucia.
Questions?
- Has the tide turned?
- Is it (ill) relevant?
- Are the actions of a few sycophants firmly indifferent to defending the people’s right to be heard and ask questions?
- Was the variation of rate a part of the construct to the project coming on stream, that has now come to HCSL Variation of Levy Order?
- Does that lend to the financial argument that the 2.5 percent (compound at 5%) adds to the self-inflected inflation is a deterrent to investment?
- is this a one-off selective tax exemption that facilitates the political–to–project development and achievements?
CNG Insights
On the face of it, much has not changed, except for the flip-side of the same coin. And perhaps, the solution to the previous crisis of nepotism, crony capitalism and conflicts of interest that breed inhumanity, inequality and poverty, has now flipped, unaware of past confessions.
There is also the ongoing concern that domestic, diaspora entrepreneurs and their investment projects that are set-aside, overlooked, and not given the same opportunity as others.
In the current construct, there appears the reincarnation of benefactors, sucking wealth out of the economy into foreign bank accounts, robbing taxpayers blind; while manufacturers, entrepreneurs, contractors and the Malaway continue to struggle.
In essence – taking a shaft – from tongue-twisting politicians of no lesser value, while the Bam-Bam Wall is the greatest feature in the “promotion of culture, human and capital investment” on struggling Saint Lucians.
