Value Added Tax and what businesses should be doing as part of their pre-implementation plans to be VAT-ready for January 2007.

All businesses in St.Vincent and the Grenadines should no longer be wondering whether or not VAT will be here in January. As outlined in the Prime Minister’s Budget Address delivered to the nation on January 23rd 2006, it was reiterated that plans are earnestly underway to implement the modern Value Added Tax and Excise Regime by January 2007. Against this background, it is a certainty that VAT will be with us come January 2007. This means that all businesses and service providers that are required to register for VAT should urgently begin to put the necessary internal systems and procedures in place to account for VAT in January 2007.

Business persons who have an integral role to play should intensify their pre-implementation procedures, and begin to put the necessary systems in place to position their businesses to be VAT-ready.

Owners of businesses are reminded that registration is compulsory for those businesses that have met the required threshold of $120,000 gross sales per year. The VAT ACT will give the necessary power to the authorities to hold persons responsible for VAT if they fail to register.

Businesses should be concentrating on what else must be done to comply with the regulations laid down in the Value Added Tax Act of St.Vincent and the Grenadines.

Some of these pre-implementation procedures are as follows:

1. Determine if your business is making annual gross sales of $120,000 per year. If so, you must register for VAT by October 2006.
2. Determine if your present accounting and cash registers are capable of accounting for VAT.
3. Businesses must be able to separate goods and services that are going to be taxed at the standard rate of 15 percent from those that will be taxed at zero percent or exempted.
4. Businesses should begin to look seriously at their current stock levels and make necessary arrangements with the Customs and Excise department for private bonded warehouses.
5. It is advisable that all registered businesses get the following books and records before January 2007:
   1. Sales book
   2. Purchases book
   3. Cash book
6. Registered businesses are encouraged to keep a separate VAT account to submit the VAT payable on a monthly basis.
7. Businesses should be prepared to print VAT-specified invoices to their registered customers.
8. Sales receipts must be issued to the final consumer showing VAT charged.
9. All importers need to become familiar with the draft VAT Bill.
10. Businesses should have a clear understanding of their present pricing structure of goods and services.

The aforementioned points should be taken very seriously by all stakeholders that will interface with VAT. Businesses in St.Vincent and the Grenadines need to be proactive in light of the impending challenges of CMSE. Thus the re-positioning of their businesses to be VAT-ready is certainly a step in the right direction.