Nine years after the last increase, government will once again increase the VAT (Value Added Tax) registration threshold, to reduce the number of businesses required to register for VAT.
This information was disclosed by Prime Minister and Minister of Finance, Roosevelt Skerrit during the presentation of the 2016/2017 National Budget on Tuesday.
According to him the VAT was introduced in March 2006 and at its introduction, a VAT registration threshold of $60,000 was set. This he said meant that businesses with annual turnover of more than $60,000 qualified to register for VAT.
Skerrit said effective 1st September 2007, his government increased the registration threshold to $120,000 for all types of businesses except hotels, commercial rental businesses and professional service providers.
“In that regard, and nine years after the last increase, Government will once again increase the VAT registration threshold, to reduce the number of businesses required to register for VAT,” he noted. “This new threshold will apply to all types of businesses that are engaged in the supply of taxable goods and services. The revenue cost of this increase in the threshold is estimated at $985,383 based on VAT declarations for 2015.”
Skerrit explained that those businesses that are now registered for VAT and which will fall below the new proposed threshold, will be deregistered.
“Therefore Madam Speaker, effective 1st September, 2016 the VAT registration threshold will be increased to $250,000 per annum for all categories of business. This we see as a first step in making it easier for smaller businesses to be tax compliant,” he noted.