2008 Budget at a glance

14.DEC.07

Company Tax

Effective January 1, 2008, companies, excluding hotels and manufacturing concerns, would be subject to income tax at the rate of 35%.

Individual Tax

With effect from January 1, 2008, individuals, including partnerships, maximum marginal tax rate would be reduced to 35% from 37.5%. Also, the standard deduction threshold will be increased to $17,000.{{more}}

VAT

• All hotels shall register for VAT.
• Water rate for domestic consumers shall be zero rated.
• Hotels service charge, provided that it is based on a rate not exceeding 10% and at least 90% of the service charge is paid to staff, shall be zero rated.
• Solar water heaters, solar panels and related equipment shall be zero rated.
• A number of food and personal items, including whole legs, table margarine, cooking margarine, baby diapers, salt, shortening, yeast, toilet issue, energy saving bulbs, undergarments, shall be zero rated.
• Licensed yacht service providers will be exempt for VAT.
• Sale of real property shall be exempt from VAT.
• Onions, lentil peas, garlic and pigeon peas will be exempt from VAT.
• Diving tours and other tourism related activities will be subject to VAT at 10%.

* Registered persons undertaking tourism developmental activities will be granted refunds for input VAT during the construction phase.

Interest Levy

Commencing January 1, 2008, financial institutions whose sole activity is granting residential mortgages will pay interest levy at 1/2%.

Excise Tax

• Increase in the excise tax on cigarettes and alcoholic beverages.
• Imposition of a 5% excise tax on aerated beverages.

Motor Vehicle Licence

Effective January 1, 2008, motor vehicle licences, excluding hire cars and passenger buses, will increase by 25%.

Yacht Licence

The Yacht Licence Act will be amended to:

• Require all locally-based yacht charter companies to provide monthly returns of revenues and number of yacht in their fleet within 15 days of each month end.
• Impose a penalty of $20,000 for non-compliance with the customs, immigration clearing provisions of yachts.
• Replace the $5/day head tax with a flat fee of $35/person for a month.
• Increase the occasional charter yacht licence to $125.
• Increase charter yacht licence to $5/foot per month.

Petroleum Products

Price/Gallon

Gasoline $12.60
Diesel $10.35
Kerosene $10.60

National Insurance Services Contributions

Commencing January 1, 2008:
Employee 3.5%
Employer 4.5%

Excise Tax

Beer and stout (per litre) $0.55
Wine, vermouth, other fermented beverages $3.30
Brandy, whiskies, rum (under proof), Vodka, gin (per litre) $3.30
Other spirituous beverages $3.30

Cigars and cigarettes of tobacco or tobacco substitute 12%
Aerated beverages 10%
Incandescent bulbs 100%

Fees and Duties – Motor Vehicles

Part A

Private Motor Cars

Not exceeding 2,000 lbs tare $315.00
Exceeding 2,000 lbs but not exceeding 3,000 lbs tare $410.00
Exceeding 3,000 lbs tare $500.00

Hiring Cars

Licensed to carry less than 4 passengers $225.00
Licensed to carry less than 6 passengers $325.00
Motor buses less than 2 tons license to carry passengers only $375.00
Motor buses of 2 tons but less than 3 tons licensed to carry passengers $400.00
Motor buses of 3 tons tare licensed to carry passengers $425.00
Rental motor cycles $175.0