Basseterre, Saint Kitts and Nevis – The Government of Saint Kitts and Nevis is pursuing several efforts to relieve financial pressures on importers and businesses to encourage economic activity throughout the Federation.
In response to the persistent financial challenges that businesses confront, the Government has decided to extend the temporary tax rate reductions for businesses, extend the temporary reduction in the Excise Tax, and reduce the average food freight charges at the 2019 price cap for importers.
Prime Minister and Minister of Finance, Hon. Dr. Terrance Drew stated that these initiatives are part of the Government’s ongoing economic recovery plan, which will greatly benefit importers, businesses, and households.
“The objective is to help to sustain business operations within the Federation, boost employment opportunities, improve the livelihoods of our citizens and residents, and contribute to the overall economic recovery within our beloved Federation as we continue to work towards becoming a Sustainable Island State”, Prime Minister Drew stated.
Temporary Tax Cuts Extended
After careful consideration, it was resolved that the temporary tax cuts of the Corporate Income Tax (CIT) from 33% to 25% and the Unincorporated Business Tax (UBT) from 4% to 2%, which were set to expire on June 30, 2023, will now be extended for an additional six (6) months until December 31, 2023.
The reductions were initially implemented to assist businesses during a period of economic instability caused by the COVID-19 pandemic. The temporary tax cuts would aid in encouraging economic growth, and fostering competitiveness. In addition, reducing food costs, encouraging cash flow, and preserving job possibilities within the country. Additionally, the Government has extended the temporary reduction in the Excise Tax that is part of the price increase for unleaded gasoline until December 31, 2023. The Excise Tax was cut from $2.25 per gallon to $0.95 per gallon for a limited time.
Price Cap for Importers
The government has also agreed to sustain the price cap for importers at the 2019 average food freight charges, which include 20 feet (ft) and 40 feet (ft) of dry goods and cold storage items.
The Government of Saint Kitts and Nevis remains committed to creating an environment that supports economic growth and a higher standard of living for its citizens and residents.