Three tax measures announced by Minister of Finance

The Customs Service Charge (CSC) levied on all goods imported into this country will increase from four per cent to five per cent, effective February 1.

This increase in the CSC was one of three tax measures announced by Prime Minister and Minister of Finance Dr Ralph Gonsalves during the 2015 Budget presentation on Wednesday.{{more}}

The Prime Minister said the increase in the CSC is being proposed to raise additional revenue to assist in the reduction of arrears to regional organisations and to assist in meeting St Vincent and the Grenadines’ on-going contributions to them.

The measure is expected to yield some $8 million in revenue.

He said the proposed increase in the CSC is in accord with a decision of the OECS Authority last year to dedicate an increase in this charge or other tax imposition to ensure the sustainability of the relevant regional trading, security, and other similar institutions.

Importers were however reminded that the CSC will only be waived in exceptional circumstances and persons receiving duty-free concessions must pay the CSC.

Additional tariffs will also be introduced on certain products listed under Article 164 of the Revised Treaty of Chaguaramas.

The Prime Minister said that currently, St. Vincent and the Grenadines regulates the importation of Article 164 commodities through its licensing regime. However, in compliance with other international commitments, The Council for Trade and Economic Development of CARICOM (COTED) has mandated that licenses be used only for statistical and administrative purposes and not to regulate or administer quota control. COTED has recommended that tariffication of Article 164 products be used instead of licenses.

“Accordingly, I propose to introduce additional tariffs on Article 164 commodities, beginning with beer, malt and aerated waters and gradually extended to other commodities.”

Other commodities on the list include aerated beverages, candles, curry powder, pasta, prepared animal feed, chairs with wooden frames, wooden and upholstered furniture, solar water heaters, industrial gases and wheat or meslin flour.

The Prime Minister said the rates to be applied and the timetable for doing so will be announced during the year.

The third tax measure is an increase in the rate of excise duty on cigarettes from $0.55 to $1.55 per 100 sticks, which is estimated to yield an additional $0.5 million.

Prime Minister Gonsalves said that figures produced by the World Health Organization (WHO) show that of all CARICOM countries with a specific excise duty on cigarettes, SVG has the lowest rate and that tobacco use is a major risk factor for the four major non-communicable diseases in SVG namely cardiovascular disease, diabetes, cancer and chronic respiratory disease.

Additionally, the increase in the excise duty will help to fulfil the obligations of SVG as a signatory to the WHO Framework Convention on Tobacco Consumption (FCTC), which includes the implementation of tax policies and pricing policies on tobacco products to contribute to the health objective aimed at reducing tobacco consumption.