Saint Lucia’s Prime Minister Hon. Allen M. Chastanet, said recently that a new macro-economic policy is in order, as the fiscal health of Saint Lucia needs urgent attention.
Mr. Chastanet said after he grasped the totality of the country’s financial situation, he began working with ministries and statutory agencies to deal with their immediate crises and to plan long term restructuring.
The Prime Minister spoke to the findings of the recently submitted Caribbean Development Bank (CDB) report.
“There were some very interesting things that were revealed in the CDB report. One, Saint Lucia has the highest percentage of taxes to GDP, meaning that we have done a really good job of raising money from taxes. So as a percentage of GDP, were at 26 percent and most countries are around 22 – 23 percent. The other thing that was interesting is that we have had the lowest rate of return on government capital investment, so the things in which government has spent its money on have not produced the same level of returns as some of the other countries.”
The Prime Minister said this is unsustainable in its current form.
“And so we have been spending time in building that macro policy and I’ve put together a group of people who are advising me, with regards to the financial direction of this country, which will obviously include the new VAT [rates] and a lot of new forms of taxation. As I said, the new taxes are to be less burdensome on the public of Saint Lucia [and will] find alternative ways of taxing different sectors that doesn’t put as much pressure on the average person in Saint Lucia and particularly the vulnerable people in our society.”
Saint Lucia’s Ministry of Finance and the Caribbean Development Bank held a press conference last Thursday, that articulated some of the findings of the report.
Watch the joint ECCB/CDB press conference at https://www.youtube.com/watch?v=HgfoPnzZQ1E