After numerous feasibility studies were conducted, Prime Minister Dr. the Hon. Ralph E. Gonsalves in his 2006 Budget outlined plans for the introduction of a modern Value Added Tax (VAT) and Excise Regime as fiscal measures to replace the old, inefficient consumption taxes by January 2007.

To this end, an Implementation Team has been appointed to oversee the coordination of all activities necessary for its introduction. A Steering Committee comprising of representatives from the Public and Private Sector and Civil Society has also been established to supervise the implementation process. CARTAC has provided an International Expert to assist with the implementation process as part of their technical assistance programme.

The implementation team with technical support prepared the white paper:- “Proposals for Value Added Tax 2007” which initiated the drafting of the VAT legislation for public discussions and awareness.

During the first reading of the VAT Bill in Parliament on the 29th June, 2006, a Select Committee was constituted. The Committee was chaired by the Prime Minister- Dr. The Hon. Ralph E.Gonsalves with other members being:

• The Hon. Attorney General
• Minister of Foreign Affairs
• Minister of Urban Development and Culture
• Minister of State in the Prime Minister’s Office
• Minister of Tourism, Youth and Sports
• Minister of Housing
• Hon. Richard Williams
• The Leader of the Opposition and
• Hon. St. Clair Leacock.

Also attending Select Committee meetings were Dr. Linton Lewis, Representatives from Tourism sector, Chamber of Industry, and Finance Officials.

The VAT Bill was submitted to the Select Committee, who met every Friday to examine the bill clause by clause. Recommendations and feedback made by stakeholders, interest groups, the business community, churches, Chamber of Industry, the Tourism sector and the general public were taken into account, and the following changes were made, such as:

• Time to claim refunds changed from six months to three months.
• The threshold changed from $60,000 to $120,000 and
• The number of items under the zero- rated and exempt list was increased.

During the debate of the VAT Bill the Prime Minister Hon. Dr. Ralph E. Gonsalves announced the change of the implementation date from 1st January – 1st May, 2007. This he indicated was due to concerns of the business community and the Tourism sector.

A word of caution to businesses: Let us not relax as the time has been extended and use this time wisely. Therefore, businesses are encouraged to see that the books and records are properly kept to identify taxable sales and be able to differentiate between the different types of supplies, so that VAT would be charged on the correct item. Familiarize yourself with the various VAT documents that are available on the government’s web site.

Registered businesses must have specific invoices and sales receipts for VAT, and as such, if you’re preparing to order, it would be advisable for you to check with the VAT unit or the governments' website before doing so.

Invoices should be prepared in triplicate and sales receipts in duplicate. For smaller businesses who would be registered, and do not have a computerized system, then a purchases book and sales book indicating the date, the supplier or sellers’ information, cost of items, and the VAT charged will be satisfactory.

And remember, we have to all play our part to make SVG VAT ready by May 2007.