ST. LUCIA-Opposition wants health and citizen security levy repealed

CASTRIES, St. Lucia, CMC—The main opposition United Workers Party (UWP) Wednesday questioned the St. Lucia government’s decision to grant a zero-percent levy to developers of a project in Rodney Bay, north of here, saying it violates the 2.5-percent Health and Citizen Security Levy.

In October last year, the government defended its decision to implement the levy, arguing that it “is one measure that aims to support our economy and provide necessary funding for essential services, namely health and security.”

“We once again take this opportunity to state that the 2.5 percent health and security levy will not be on food items, medication, medical equipment, security equipment, and selected building material. Therefore, we do not expect an increase in the price of these items at their point of purchase locally unless prices increase overseas,” the government said.

However, in a July 17, 2024, letter to Prime Minister Phillip J Pierre, the UWP and Opposition Leader Allen Chastanet called on the government to repeal the levy, adding that selective exemption of the measure “is both unlawful and unjust.”

Chastanet said that the St. Lucian public only became aware of the exemption for Rodney Bay City Center Ltd. last Friday.

“The Health and Citizen Security Levy Act, which mandates a tax imposition of 2.5 percent for a period of two years on a wide array of goods and services, has had a predicted disastrous effect on our people and economy. Since its introduction, it has been riddled with inconsistencies and has compounded the impact of inflation on households and businesses.’

Chastanet said what is concerning is that the government had indicated during the passage of the legislation that “the revenue from the levy would be used to bolster our health and security sectors.

“Regrettably, it after that became clear that this was an untruth and that this tax was, in fact, implemented to comply with terms imposed by the Caribbean Development Bank and World Bank for policy-based loans. So, the tax was passed for revenue recovery purposes and had nothing to do with health and security, as you had represented.”

The Opposition Leader said the levy has negatively impacted the local economy, which is recovering from the impact of the coronavirus (COVID-19) pandemic.

“By taxing essential goods such as clothing and footwear, furniture, and telecommunications services, the levy was bound to directly impact the public, especially the poorest and most vulnerable in our society.”

He said that while the government promised that the levy would not impact the cost of food, “time has proven otherwise, as essential services like transportation and business services were subject to the levy.”

Chastanet said that the recently proposed exemption of the levy for goods and services to be supplied for the Rodney Bay City Center developer “is therefore understood but unlawful and manifestly unfair.

“Nowhere in the Act is there a provision that grants Government the authority to selectively exempt goods and service providers from this levy for an ‘approved developer’ as you now seek to do. Rightfully, all exemptions or increases should be granted to the benefit of all or none”.

Chastanet said that the opposition is “therefore left to speculate that this particular concession is necessary to persuade the developer to proceed with the investment, and you now appreciate that the levy is a deterrent to investment.

“This selective exemption is not only unlawful as the Act does not provide the enabling provisions for such exemption, but equally, it is patently unfair to all our citizens. It also raises serious questions as to how Inland Revenue and Customs will be able to comply with this Order legally”.

He said the decision “insults the ordinary St. Lucians who struggle daily to carry this added burden. It is even more egregious that you have not appreciated their sacrifices and have not similarly seen it necessary to relieve them.

“Prime Minister, this blatant inconsistency sends a distressing and unacceptable message that the sacrifices are not to be made by all. We implore you on behalf of all St Lucians and businesses alike to immediately correct this injustice and instead use your legal authority under the Act to terminate this oppressive levy for everyone,” Chastanet wrote.