St Lucia implements 2.5 percent levy on goods and services

By Caribbean News Global contributor

CASTRIES, St Lucia – According to The Saint Lucia Air and Sea Ports Authority (SLASPA), “effective October 2, 2023, the health and citizen security levy will be applied to invoices generated for goods and services.”

Taxable services

• 5 percent for all services outlined in Schedule 2 of the HCSL Act No. 16 of 2023

Exempt services

• Any service which is exempt or zero-rated as per the VAT Act Cap 15.42

Any service not outlined in Schedule 2 of the Health & Citizen Security Levy Act No. 16 of 2023

Inland Revenue Department

As stipulated by the Inland Revenue Department, the administration of the health and citizen security levy is governed by:

• Health and Citizen Security Levy Act No. 16 of 2023
• Value Added Tax Act Cap 15.42 (see Section 12(1) of the Health & Citizen Security Levy Act)

Comptroller at the Inland Revenue Department (IRD) Marcia Vité, previously indicated:

“It is a levy. It is definitely not a VAT. It is a levy that will be collected separately from what we know as the VAT. What happens is that the VAT is the final tax. So the VAT will be levied on your goods and services, and then on the levy. So the VAT, as it always has been, is the final tax.”

A levy by definition

A levy is an act of levying a tax, fee, or fine. A Levy is imposed or collected by legal authority. A Levy is used to describe the act of imposing or collecting the charge. However, health and security levy not a vat, says St Lucia government officials. 

In an attempt to provide clarification and information on the implementation of 2.5 percent levy, Felicia Elie Ag. deputy comptroller at the IRD, added:

“This is quite a new tax for all of us and we know it’s both on imported goods and services. Whereas Customs is charged with the responsibility for the good part Inland Revenue has the responsibility to on the services part.”

“Businesses would have the entire month of October to collect and they are to remit the collection for that month by the 21st of November. So the levy basically is collected 21 days after a month has ended.”

“It is an offense to collect any tax if you are not obligated to do that. For instance, if you are not a registrant for the levy and you collect the levy then definitely it is an offence and you definitely can be charged for doing so.”

Goods: The levy is applicable only to imported goods, however, there will be no levy applied to any good that is zero-rated or exempt in accordance with the VAT Act. Additionally, the levy will not apply to goods provided by hotels and other providers in the tourism sector.

Services: There shall be no levy on any service that is exempt or zero-rated in accordance with the VAT Act; or, is a service provided by hotels and other providers in the tourism sector.

• Watch video report.

But, according to SLASPA’s press release on October 11, 2023: “The health and citizen security is a tax charged on:

• • Importation of goods;
  • Provision of services by a VAT-registered taxpayer in Saint Lucia;
  • Provision of services by a non-resident to a VAT-registered taxpayer in Saint Lucia.”

Deputy Comptroller at the Customs and Excise Department, Ava Marius-Deterville, previously said:

“All the new taxes emanating from the budget cycle for this year we are responsible for implementing these new taxes on the applicable goods at the time of importation or when the taxes become payable. For those goods which are exempted—for example the building materials—we would not apply these taxes to them. So in essence, Customs is responsible for the collection and the protection of government revenue.”

• Related: St Lucia government botched policy

The health and security levy is expected to generate at least XCD 33 million annually. On September 27, 2023, the Office of the Prime Minister said the government of Saint Lucia introduced the health and citizen security levy to raise additional revenue to finance health and security projects for the benefit of Saint Lucians and visitors to our island.

“The revenue from the health and citizen security levy will go toward the maintenance of police stations around the island, providing additional tools and equipment for law enforcement officers; and will also fund the implementation of the government’s Universal Health Care (UHC) project to make public health care more affordable and accessible for the average Saint Lucian. […] The government of Saint Lucia remains dedicated to improving the health and security of its citizens.” 

While no one is safe in Saint Lucia with 66+ homicides and heading for an infamous record, the preserve of tranquillity is such that ” I feel Saint Lucia is getting very negative.” The facts and truth affirm that “Our country is fast becoming a dangerous neighbourhood,” said the assistant commissioner of police with responsibility for northern division, Troy Lamontagne.

“Let us not allow our situation to worsen. I encourage you to do the right things every time to make our communities safe and secure. Safety and security will not be achieved by chance. It will be accomplished by deliberate and direct action against those who threaten the safety and security of our communities, property, and children.” 

Perhaps the four drones from the government of Taiwan for use in fighting crime will help as “the police are trying – nothing is perfect,” Prime Minister Philip Pierre explained recently, “I am not yet satisfied, but it is a work in progress.”

Currently, the government of Saint Lucia is hosting the inaugural Caribbean Center of Excellence Regional Leadership Summit, spearheaded by the Saint Lucia Forensic Science Lab. The two-day summit is sponsored by the US Department of State and the Bureau of International Narcotics and Law Enforcement Affairs. The summit runs from October 10–11, 2023.

“The Saint Lucia Forensic Science Laboratory is on course to be recognized as a Center of Excellence for Forensic Science in the Caribbean region. The lab currently offers services in drug chemistry, serial number restorations and tracing, body fluid identification, and DNA analysis. The Saint Lucia Forensic Science Lab also helps to build national and international capacity through training in our respective disciplines, said the Office of the Prime Minister.

• Watch video report.

Meanwhile, the Saudi Fund For Development US$75M loan agreement to reconstruct and rehabilitate St Jude hospital, part of SFD’s efforts to support sustainable development in developing countries and Small Island Developing States (SIDS), the 2.5 levy is tantamount to a safeguard on the repayment process – with a five-year grace period at 2 percent interest.