St Lucia’s VAT Collection a Continuous Challenge

ST. LUCIA – Saint Lucia’s government is struggling to collect millions in value-added tax, despite VAT being the largest source of state revenue.

Officials admit a major problem is businesses collecting VAT from consumers but failing to remit it to government.

Phillip J. Pierre, prime minister of Saint Lucia
“Very disappointed.”

Prime Minister Phillip J. Pierre last month said his administration is “very disappointed,” adding that a tax amnesty program has not produced the results expected.

Parliament is set to consider a resolution this week to waive penalties on outstanding VAT for tax periods ending December 31, 2023, cutting the penalty rate from 10 percent to zero through May 2026.

Critics warn the move could reward noncompliance and signal weak enforcement by the Inland Revenue Department and Customs.

Analysts say VAT nonremittance amounts to tax fraud and argue the real solution is strict enforcement of existing laws, not more amnesties.