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View List of: PREVIOUSLY TAX-FREE ITEMS NOW SUBJECT TO GCT
STATEMENT TO PARLIAMENT Download Ministry Paper No. 21 Mr. Speaker, in my Opening Budget Presentation I indicated that whilst the standard GCT rate at 15% would remain there would be changes to the list of exempt and zero-rated items in order to broaden the base for collection. Subsequently, there has been some speculation as to what items would now be taxable. This speculation is reflected in the speech by the Opposition Spokesman on Finance, yesterday. First, I should define the terms "zero-rated" and "exempt." Zero-rating involves a type of relief in which no tax is charged on the sale of goods, and in which any tax which was paid by the supplier of the goods in carrying out the taxable activity can be recovered as a credit or refund when the tax return is filed. "Exemption" also involves no tax being charged when goods are sold, but in this case any tax paid by the supplier in carrying out the taxable activity cannot be recovered as a credit or refund. In. both cases, the consumer of the goods is not charged any tax. As promised, a comprehensive list is being published and has been tabled today as a Ministry Paper. Mr. Speaker, the Administration has always been, and remains, committed to ensuring that those at the bottom of the income ladder remain protected to the greatest extent possible. As such, I wish to highlight the areas which still remain protected. Those include a full range of foodstuff consumed by the majority of the population, Including cornmeal, soya meal, wheat, fresh fruits and vegetables, meat, poultry, cornbeef, etc. Excluded are items such as imported apples, pears, apricots etc. In terms of the agriculture sector, zero-rated are machetes, files, hoes, forks and planting materials. Health - Zero-rated are any drugs specified in the Fourth Schedule that is, prescribed drugs in generic form, invalid carriages, all contraceptive devices and substances. Medical, dental, optical and nursing fees are exempted. Places of worship - zero-rated are items purchased or imported for furnishing or decorating places of worship, altar bread, unleavened bread, communion wafers, candles, myrrh and frankincense, etc. Rental - exempted is rental of residential property for residential purposes. So are financial services. Education - school books, exercise books are zero-rated and exempted are uniforms, bags, school fees, stationery, goods and services acquired by the University of the West Indies, the Council of Legal Education, the University of Technology and Northern Caribbean University. Exports - The export sector continues to be protected and the listing is shown in the Ministry Paper. In summary, Mr. Speaker, we have attempted to meet the twin objectives of broadening the tax base and that of closing the fiscal deficit even whilst maintaining protection for the most vulnerable groups in the society and promoting production and exports. The items set out in the attached Appendix will be zero-rated under Part Two of the First Schedule of the General Consumption Tax (GCT) Act and exempt under the Third Schedule of the General Consumption Tax (GCT) Act. Please note that the following information is subject to changes within the first four weeks following the Closing Budget Presentation
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