The tax amnesty season has already started and today we have important news for the residents of St. Vincent and the Grenadines. This territory revealed the latest budget with good news for taxpayers. It refers to both, private individuals and companies.

Legal entities will have company tax reduced by 2.5%. Also, the hotel owners will have to pay 1% less income tax. These are the main changes for businessmen.

Regarding private individuals, it is important to mention personal income tax reduction. It will be less by 2,5% and the same terms apply to company tax. According to the new budget, final tax amount is 30%. Also, personal income tax is not paid before you earn first XCD20,000 and tax rates apply only when residents cross XCD20,000 threshold.

There are also VAT changes and the vehicle surcharge for Saint Vincent residents. For cars, older than 4 years, tax will be increased depending on its engine capacity. Similarly, VAT will also increase for taxpayers. First, hotels, apartments and other short-term residents will have to pay additional rental tax of XCD8 per night. This is a novation for filling the climatic risks fund which was created a year ago. Also, people who consume more than 150kWh units, will be subjected to tax. This threshold was 200kWh units before the latest budget.

Along with the abovementioned changes, a three-month tax amnesty has already started. What is this and what is it for? The main idea is to let taxpayers, having any debt, to repay it within the three months. Before 15th May 2018, there is a possibility to negotiate your payment debts with tax authorities and to take-off your hand from the urge to pay penalties.

After the three-month term ends, the Inland Revenue Department will have to take measures against taxpayers, including various penalties. This is a part of the government’s plan to manage taxation process and to create more focused and effective system of collecting taxes.

St. Vincent and the Grenadines’ government is now in the middle of the new taxation reform. It is promised that after all tax amounts and procedures are stabilized, the system will show itself as a very effective one. As a result, there will be less loopholes, tax evasion will go down, rules for taxes and debts will be clearer. Currently, Saint Vincent is already a business-friendly jurisdiction and, after the Tax Administration Procedures Bill and Amending the Income Tax Act adoption, it will become even more effective and clear for taxpayers.