The
Government of Grenada has announced, in its Budget for 2013-14,
comprehensive changes to the island's VAT regime, and proposals to
introduce a Citizenship by Investment Program.
The
Government has committed to a review of the VAT regime following
lobbying from local businesses. The VAT waiver on imports, local
businesses argue, places local purchases at a competitive
disadvantage to imports. To address these concerns, the Government
has committed to extend VAT concessions to locally-produced products.
Other
legislative amendments will allow voluntary registration for VAT
purposes by small businesses from January 2014.
In
addition, the Government intends to cut the VAT rate on construction
sector inputs, from May 1, 2013, until December 31, 2014, on sand;
cement; roofing materials; steel; lumber; and construction blocks.
Furthermore, construction services rendered for projects valued at
less than XCD400,000 (USD148,000) until December 31, 2014, will be
exempt from VAT.
The
Government has also replaced the Manufacturers Rebate with the
Manufacturers Competitiveness Program, providing for a tax rebate of
5 percent of VAT-exclusive sales for qualified manufacturers,
effective from May 1, 2013.
Other
proposals raised in the Budget include the establishment of a
Citizenship by Investment Program, which the Government has said will
mirror similar regimes in place in other Caribbean territories. The
program will be developed for launch in June 2013, the Government
said.
Lastly,
in the second half of 2013, Grenada will launch new e-taxation
services, allowing taxpayers to register for tax purposes and obtain
a Tax Identification Number online, and file their monthly and annual
returns electronically.
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