Sales tax to replace VAT

News Mya Quamie 2 Hrs Ago

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Finance Minister Davendranath Tancoo has announced the government's intention to revise and replace the Value Added Tax (VAT) system.

He said the existing system has become increasingly onerous, burdening both businesses and the Board and Inland Revenue Division.

Tancoo said this has led to a buildup of refund claims which undermine business confidence and straining fiscal management.

He said the system would be, if feasible, replaced with a sales tax.

The tax would be applied at the point of final transaction

"The concept of the sales tax is simpler, more straightforward, easier to administer and eliminates the persistent and complex problem of calculating and auditing refund claims.

"We plan to initiate this review in the current fiscal year with the necessary technical guidance."

He said the transition would require comprehensive legal amendments and administrative reconstruction, IT reconfiguration and close consultation with stakeholders across Trinidad and Tobago.

He said the government will clear the current backlog and ensure any transition to the sales tax is revenue-neutral and socially balanced.