No Intention To Introduce Personal Income Tax or To Increase Corporate Income Tax
Prime Minister and Minister of Finance, Dr. the Honourable Timothy Harris, has reaffirmed that the Government of St. Kitts and Nevis has no intention of introducing Personal Income Tax or increasing Corporate Income Tax.
During his presentation at this morning’s sitting of the National Assembly the Prime Minister said:
Mr Speaker Sir, I rise to address certain misinformation in the public domain regarding Income Tax (Amendment) Bill 2020. Contrary to the untruth that my administration will pass a Bill to increase Income Tax, my administration has no intention to introduce Personal Income Tax or to increase Corporate Income Tax.
Indeed careful reading of the Income Tax (Amendment) Bill 2020 would have made clear to an enquiring mind that the Bill merely seeks to clarify the application of taxation to ensure full compliance with international good governance standards. Specifically, the Amendments will ensure that we meet our commitments to the European Union (EU) and the Organisation for Economic Cooperation and Development (OECD) and avoid the reputational damage and consequential financing implications which blacklisting causes. As a responsible Government and highly respected member of the international community my Government cannot shirk from our obligations even when they are inconvenient. This is not the only legislative amendment that we have made or will be making in response to the EU and OECD.
Over the last 20 plus years the Country’s National Assembly has had to make amendments to a range of Tax regimes that were deemed inconsistent with the EU and or OECD regulations. At the level of the Nevis Island Assembly, it too has responded with amendments to the Nevis Business Corporation Ordinance and the Nevis Limited Liability Company Ordinance to comply with international tax good governance principles.
Our efforts over the last 4 years to act in a timely manner eventually led in February 2020 to St Kitts and Nevis being removed from the EU’s list of non-cooperative jurisdictions. We must do all we can to maintain good ratings when we are accessed. The draft Bill has been circulated for input of all entities and groups. Based on feedback the Bill will be amended as deemed necessary. This is an enhanced good governance approach.
No New Taxes
It must be a particular special moment for all of us to recognize that over the past 5 years of my administration we managed the Country achieving unprecedented surpluses year after year without introducing one single new Tax measure.
We are a Government disposed to keeping taxes low. The record is also pellucidly clear that for the last five years my Team Unity Government has not introduced any new taxes. Instead we have reduced the tax burden on our people by removing VAT from all food items, educational supplies and funeral expenses. Mr. Speaker, we went even further and more recently, as part of our stimulus package in response to the negative impact of COVID-19, we have instituted a series of tax breaks for the benefit of taxpayers large and small. This included the removal of VAT from and Import Duty on additional hygiene items and Import Duty and Customs Service Charge on selected food items for six months. Further, our efforts in this regard also involved a reduction of the Corporate Income Tax rate from 33% to 25% and a 50% reduction in the Unincorporated Business Tax rate from 4% to 2%, for a period of six months. Going forward, the Corporate Taxation Regime would need to be updated to meet the needs of our Country. “Our vision and focus are to eventually reach the point where our Corporate Tax system is fully modernised and could responsibly meet the needs of businesses and investors and maintain the competitiveness and attractiveness of St. Kitts and Nevis as a destination for financial services and investment in general”.
Truth be told, Mr. Speaker, since the inception of my Team Unity Administration in 2015, we have been transparent and accountable with respect to providing clear information on the challenges in respect of the tax regime operating here in the Federation. St. Kitts and Nevis is a responsible member of the international community and is required to respond appropriately to global developments and changes in standards when they occur. My Government is unwavering in its stance to protect the interest of our country and therefore remains committed to ensuring compliance with international standards.
May it please you, Mr. Speaker.