Saint Lucia Manufacturers have expressed concern to Prime Minister Philip J. Pierre over implementing the 2.5 percent health and citizen security levy and are seeking an urgent meeting with him.
“With the publication of the subject Act on July 18, 2023 and your pronouncements in Parliament that the manufacturing sector would not be affected by this new 2.5% levy, as an association, we were surprised to note that the manufacturing sector was not exempted from the Levy,” a July 28 Saint Lucia Manufacturers Association (SMA) letter to Pierre stated.
The letter noted that although the measure exempted food, as per a meeting between the Inland Revenue Department (IRD) and manufacturers on Wednesday, July 26, 2023, at the port, all packaging and raw materials imports will attract the Levy.
According to the SMA letter, this change in position makes it extremely challenging for its members to rebound from the COVID-19 pandemic.
“This would also mean an increase to our price on products to consumers as it would be compounded on the already established VAT, making the increase more than a 2.5% impact,” the document observed.
It also said the timing between the publication and implementation of the Act was challenging for SMA members.
The letter stated that the members would need to adjust their systems, and the IRD would need to train with SMA members.
It recalled receiving information regarding the issue of a new levy reporting form.
But the SMA letter explained that the organisation had yet to, at the time, receive it.
“Our Executive Director, Ms. Paula James, has been reaching out to the Ministry of Commerce from the time of the announcement of the new levy till now, and they also have not been able to provide any insights on how we are to proceed forward,” the letter, signed by SMA President Marguerite Desir disclosed.
“We are therefore seeking an urgent audience to meet with you and your team to discuss the implications this can have on our production,” the letter stated.
The Government of Saint Lucia plans to introduce a Health and Citizen Security Levy for two years commencing August 2, 2023.
The Levy will be payable to existing VAT registrants responsible for remitting to the Comptroller of Inland Revenue.