VAT is the acronym for Value Added Tax. It is a general consumption tax with a different collection mechanism from similar taxes collected in St. Vincent and the Grenadines presently, which VAT will be replacing. The rate of VAT is 15 percent. It is also important to note that VAT is not an additional tax, but rather a replacement tax.
VAT is paid on the value of your imports at Customs, or the value added or mark up on goods and services supplied in St. Vincent and the Grenadines by one business to another or to the final consumer. VAT is also paid on goods and services consumed locally.
VAT is designed to ensure that all forms of consumer spending are taxed evenly and fairly.
Although VAT is paid on inputs used to produce goods and services, VAT is not a tax on tax. This is because, unlike the present taxes it will replace, VAT paid on inputs by a registered producer, distributor or retailer is deducted from VAT received on their sales made to consumers and businesses.
The existing taxes that VAT will replace are:
- Consumption tax;
- Hotel tax;
- Stamp duty on domestic cash bills or receipts;
- Entertainment tax; and
- Telecommunications Surcharge.
