The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Government is just a weeks away from putting out its draft Value-Added Tax (VAT) legislation, a Cabinet Minister yesterday disclosing that it was seeking to release the accompanying regulations at the same time.

“With our tax legislation you have the law and you have the regulations, which speak to how the law is applied,” said Michael Halkitis, minister of state for finance. “With legislation like this, the regulations are extremely important.

“We have had some consultations already with some of the business groups. We have had our people draft legislation. We have had the Attorney General’s Office look at it and we’re tweaking it.

“ We want to introduce the legislation and the regulations in the public domain at the same time. Sometimes the legislation goes first and the regulations come after. We want to do both at the same time because it’s that critical. We believe that we are a few weeks away from putting that in the public domain; that’s our timetable.”

The Government is proposing to implement VAT on July 1, 2014, at a rate of 15 per cent, with the hotel industry subject to a lower 10 per cent rate.

The Government plans to eliminate the 10 per cent hotel occupancy tax rate, replacing it with VAT at the same rate. A 10 per cent VAT rate will also be applied to all hotel food and beverage sales. Companies with an annual turnover of $50,000 or less will be exempt from having to register to pay VAT.

Mr Halkitis said the Government wanted the business community, and VAT registrants, in particular, to view the legislation as well as regulations, then make further comments.

“We have received a lot of feedback already that we have incorporated,” he added. “We want to be as complete as possible when we come to this legislation, so it’s going to be a matter of weeks. Before that you’re going to see some action by the Ministry of Finance, where we will be doing some more public consolation to give an understanding of what VAT is and how it operates in genera,l so that when the legislation comes people have a better understanding.”