Opposition Leader Allen Chastanet has welcomed the Government’s latest tax amendments, but cautioned they must not come at the expense of the middle class.
He was responding in the House of Assembly on Tuesday to the tax measures presented by Prime Minister and Minister for Finance Philip J Pierre, including a motion to approve the Value Added Tax (VAT) Alteration of Rate of Interest Order. That order reduces the rate of interest on tax payable that is not paid by the due date. The Government has also proposed waiving the penalty for unpaid VAT. Prime Minister Pierre also presented the Income Tax Amendment Bill.
“The Government tried its best to relieve the burden of taxation on the public of Saint Lucia, even when the public was at fault, in that they did not pay things like the VAT,” he told the House. Pierre explained that allowances, previously capped at $30 000, have now been increased to $40 000.
In his response, Chastanet noted that the amendments stemmed from proposals contained in the Saint Lucia Labour Party’s 2021 manifesto.
“I remember sitting on the opposite side at the time when that proposal was made and I knew as a minister of finance that if, in fact, that was to go through, that would have eliminated almost 50 per cent of the people who currently pay income tax from having to pay income tax,” the Member for Micoud South stated.
According to him, the government later realised the cost implications of that proposal and adjusted it accordingly.
“They amended it to now what we’ve seen today,” he said.
Chastanet argued that the middle class would be most affected by the changes and cautioned against policies that could weaken that group.
“They are the ones who are going to suffer, and they found themselves substantially worse off with that amendment,” he said. “The Government was forced to make this further amendment based on the pressure that was being brought to bear upon them and to understand the mistake that was made and the negative impact it was going to have.”
Chastanet also called for discussion on the United Workers Party’s proposal for a $2 500 base salary for tourism workers. He credited former Prime Minister Dr Kenny Anthony with removing taxes on gratuities earned by tourism workers but noted that high operating costs continued to burden hoteliers.
He stressed that the middle class drives economic growth and the government should be implementing policies to grow that segment of the population.
“It is that middle class that’s going to generate the level of growth that we want to see,” Chastanet said. “It is the middle class that can afford to build their own homes and to save the money.”
He further accused the government of preparing the country for higher taxation, pointing to repeated statements by the Prime Minister that Saint Lucia’s tax threshold is lower than the average.
However, the opposition leader commended the government on the tax amendment, stating that the original threshold was inflexible and too much of a burden.
“So I applaud the government. Bravo that you’ve come to the House and you’ve made that amendment and given relief to the middle class of this country. But I’m going to say there needs to be more introspection in the upcoming budget as to what is going to happen to Saint Lucia,” he stated.
