Government to grant tax credits on some IT projects

Businesses or service providers who invest more than EC$5 million in any Information Communication Technology (ICT) project in St. Vincent and the Grenadines will be provided with a tax credit.{{more}}

This is according to Prime Minister Ralph Gonsalves, who made this announcement during his Budget address on Monday, January 6, 2012.

Gonsalves stated that the provision of the tax credit to businesses and service providers will be done in order to promote the use of ICT technologies to enhance efficiency and competitiveness. He added that eligible expenditure for this programme will include the development and installation of IT systems and infrastructure, and related education and training to improve the quality of human resource and to increase the pool of skilled labour.

Gonsalves indicated that the tax credit will amount to 25 per cent of eligible expenditure in any given tax year and any unused portion may be carried forward. He further proposed that in the application of the ICT tax credit, the Inland Revenue Department will permit the carry back of any unused credit against previous year’s taxes.

“The main advantage of this investment tax credit is that its focus is specific. A firm receives the benefit of the allowance against its tax liability only if it invests,” he stated.

“Effectively, the investment tax credit translates into a lower rate,” Gonsalves added.