CASTRIES, St Lucia (CMC ) — The St Lucia government will next week provide a glimpse of its revised tax policies as it seeks to offset growing financial misfortune, a consequence of low growth and high growing indebtedness.

Prime Minister Allen Chastanet is expected to address the nation at month end where he is expected to announce sweeping changes to his administration tax policies that will include a revised rate for the Value Added Tax (VAT), which currently stands at 15 per cent.

The promise of a revised rate for the tax system introduced on October 1, 2012, was made by the United Workers Party (UWP) as it campaigned successfully for the June 6 general elections as part of a five point plan to bring immediate relief to St Lucians.

Chastanet, speaking to the Caribbean Media Corporation (CMC) ahead of his planned address revealed that the quantum of taxes collected here as a percentage of gross domestic product (GDP) versus other countries, suggests that the island was being seriously overtaxed, and there was not enough money in circulation.

What’s more, he said, when money went into the government’s coffers it did a poor job of spending it resulting in poor economic returns.

“We think that the private sector will do a substantially better job at deciding how to spend money. So we are going to reduce the Value Added Tax, that’s a fact and we will make an announcement at the end of the month.

“We will make a second announcement in the new year of a complete overhaul of our tax system as we think there are less burdensome ways in which the tax system can be less strenuous on the more impoverished people in the country, ensuring that it would not act as a disincentive to growing business or those making investments,” he said.

Chastanet said that with very few sectors to invest in government would be granting some relief to the corporate sector, which at the same time would need to pay a fair share to help sustain the economy.

He said that with unemployment figures estimated at 23 per cent, providing employment remains a top priority and emphasis will be placed on seeking to attract investors to the island.

“We have seen that investment has dried up, the only new investment the former government was bringing to the table was through the Citizen Investment Programme (CIP) and not based on the economics or the brand of St Lucia,” Chastanet added.

He said that government has been identifying investors to support critical areas of investment such as tourism, in an effort to increase the number of hotel rooms and diversify the islands economic base.

Other areas such an information technology centres and financial and agriculture sectors are critical to encouraging national development he said.

“The economy is too small, we can’t afford the best education system, we can’t afford a high quality health care system, we can’t afford the level of security that we need, and neither can we afford an economy that is going to generate opportunities for everybody, not only to be able to earn an income but one they can build a life on.”

Chastanet said that his administration intends to focus on the key sectors and areas “which is what the quadrant plan does.

“We are putting teams to focus on these areas with the intention of just driving each one, which is a brand and business by itself,” he said, adding that the government aims to double the GDB over the next 10 years.

He said during the budget presentation next April, a four-year plan will be tabled which should redound to achieving that objective.

Chastanet said St Lucia stands to benefit if more creative approaches are made at attracting the right kind and quantum of investment.

“One billion dollars can’t cut it,” he said in reference to the annual budgetary allocations.

“We are not creating enough economies of scale to be able to compete against other nations, so we believe that doubling the GDP is only the beginning,” he added.