The St. Lucia Chamber of Commerce Industry and Agriculture, the Bar Association and the St. Lucia Institute of Chartered Accountants, sang from the same hymn sheets during engagements with the Minister for Finance, as consultations on the Health and Citizen Security Levy, particularly that on Domestic Services, intensified as these key private sector bodies delved into the implementation issues that would arise.
The Government agreed that the business community required more preparation time to (1) understand, (2) prepare their businesses and (3) adjust and program their billing and accounting systems to manage the particular quirks required to accommodate the H&CS Levy on Services.
Rather than changing the commencement date, Government utilized a simpler approach of zero rating the Levy on Services for August and September and placing it at the intended 2.5% starting October 01, 2023. Whilst this reprieve will allow many firms to make the necessary changes to their software, some firms may still not be ready by that date and will probably just have to absorb this cost until they do.
Members are encouraged to speak with the Inland Revenue Department to glean a clear understanding of how the system is expected to apply in their business case, as the various nuances of businesses may result in unique approaches and applications. Remember VAT is the final tax, and so the Levy will be assessed before VAT is applied on the invoice.
It will be useful to speak to the IRD about the treatment of items which VAT and the Levy may have been paid upon before, to understand the expected treatment to be applied.
The Levy will, of course, increase cost of goods and services as any tax does, and the Chamber is closely monitoring its impact on costs, inflation and of course consumption. Please share with us your experiences going forward in this regard.
The Business Community in St. Lucia, particularly those trading in food products have been in the firing line and facing the ire of consumers and public officials as the continuing price increases brought on by global factors hits the consumers directly in the pocket.
Due to a number of factors, pandemic-related supply chain disruptions, inflation, rise in shipping costs, negative natural weather phenomenon, food prices have risen steadily since 2020. Thankfully, due to steps taken by Central Banks in the Developed World inflation has been slowing in the past year and the cost of food is not increasing as fast as it once was. Unfortunately, St. Lucia's latest CPI is not readily available to show the change in price movements. The CPI uses indexes to measure changes in average costs of items in a given period. There are specific indexes for these items, including food costs.
Factors like the cost of fuel, raw materials, transportation, to name three have all contributed to increased costs generally. Moreover, firms who lost money for two years during the COVID-19 Pandemic do not have the capacity to absorb price and increased costs, and so pass these on to consumers.
This phenomenon is not restricted to Food and Grocery items, but a wide range of products have witnessed significant price rises for many of the same reasons, yet you do not hear the hue and cry as expenditure on these items are seen as discretionary expenditure while spending on food is treated as more sacrosanct. Consumers for some reason think that firms selling food should absorb price increases and show restraint on passing on increased costs and cut their margins, so consumers are able to enjoy lower cost food, while no such expectation or demand is placed on providers of other goods and services.
In St. Lucia consumers and government believe that Government must intervene and impose limits on mark-ups by businesses in the food sector, through price control. Consumers and public officials are quick to accused businesses of price gouging, as in their minds, firms should not increase costs to consumers and that price levels must always suit their perception and pockets. In fact, many of the comments made by Officials are simply attempts to shift and apportion blame and only result in an unfair and growing negative and antagonistic attitude towards businesses.
It would appear useful for Chamber Members to band together to conduct some public education to explain to the various publics, how prices are built on costs, what is the difference between margins and mark-ups, the paradoxical effect of price-control measures and what constitutes profits and the role of profits in allowing businesses to function, pay taxes etc.
A public education program on the matter is sorely needed and members will soon be invited to support this program.
Just a few footnotes to the above:
Food prices are projected to rise in 2023, albeit at a slower pace than they did in 2022, according to the USDA.
The St. Lucia Chamber of Commerce Industry and Agriculture was excited to host their Executive Luncheon, after an almost three year hiatus. The event was held on Tuesday, September 12, 2023 at Harbor Club, sponsored by SLASPA, who was also the featured presenter.
SLASPA relished the opportunity to speak directly to chamber members, one of the primary stakeholders, on their plans and capital projects that were ongoing and scheduled for the upcoming year.
With almost seventy members attending, SLASPA went through great lengths and detail to speak to the work they had been carrying out, as far as improving their stock of equipment purchases and upgrades, that would directly impact cargo delivery and services. In addition, SLASPA through their Chief Engineer, Alva Francis, advised members of their plans and strategy to upgrade the wharfs with minimal disruption to services, a feat to be achieved through creative scheduling and work plan organization, with a deliberate policy of having much of the construction work taking place off-site.
While Chamber members listened with rapt attention, they were also sharp in asking probing questions to draw out their specific interests and concerns. The Chamber has placed a short video clip of post luncheon interviews and the presentation on the chambers' website, where members have access to view.
The St. Lucia Chamber of Commerce on the heels of its first Executive Luncheon, where SLASPA was the featured presenter, has followed up with hosting a second executive luncheon in September, with Global Ports Holding(GPH), as requested by attendees at the SLASPA Luncheon. GPH updated the business community on the Port Castries and Port Soufriere Development Projects. The second Executive Luncheon was hosted at Harbor Club and sponsored by GPH, on September 21st, 2023. Dr. Sean Matthew, Special Advisor, Business Development Coordinator for GPH in the Caribbean, Presented on behalf of GPH.
Global Ports Holding, operators of over thirty high quality cruise ships ports around the world, has been given a forty-year concession to manage the Castries Cruise Ship Facility at Port Castries with an agreement to upgrade not only berths, but landside facilities to world class standards, to accommodate the largest cruise ships in an upgraded Port Castries. This development does not include cargo facilities or services.
In concluding the concession and development agreement, the important town Port of Soufriere, the most visited place by tourist in St. Lucia, will also get a much-needed set of upgraded facilities and services to make the destination more inviting and economically viable to the citizens.
GPH will invest fifty million united states dollars in the project, with US$20 million earmarked to clean SLASPAs debt for cruise facilities. GPH, in using its influence and global relationships, plans to double the cruise passenger tax, while simultaneously increasing visitor arrivals and throughout within two years of project completion. It is anticipated that the development work will be completed within 24 months.
GPH prides itself on partnering with local communities where they operate and using local knowledge and talent to make their project's work. St. Lucia can look forward to an assertive and dynamic development partner, willing to invest equity in ventures with locals, to ensure the destination is more attractive and viable to all partners. The Chamber will shortly be sharing contact details for the project personnel, as the project is expected to unfurl within two months after all conditions precedent to first disbursement have been met and the path cleared for physical construction with permits and approvals in hand.
Capacity Limits, Pricing and the Electricity Supplies Act; Key Considerations and Imperatives!!
The St. Lucia Chamber of Commerce Industry and Agriculture is pleased to host another in its series of Executive Luncheons where members are provided with critical information on key issues affecting business. At this Executive Luncheon on October 20th, 2023, members will be provided with valuable information and gain a better understanding on the matter of Renewable Energy Capacity Limits and Pricing Policy through presentations to be made by the Department of Public Utilities and LUCELEC.
The review of the Electricity Supplies Act is ongoing with numerous consultations convened by the National Utilities Regulatory Commission. The St. Lucia Chamber of Commerce has participated in many and believes that it is essential that the Business Community gets as much information as possible on the critical national and social issues that are pertinent to the subject.
Therefore, the Chamber is hosting this important information and knowledge-sharing event, where members can hear from the Agency of Government (Department of Public Utilities) that will be driving and guiding the Governments policy on the matter.
That way members will become more aware of the considerations and imperatives that must be taken account in the decisioning process. More importantly, Members must also be fully cognizant of the issues that affect the stability and consistent delivery of reliable and affordable Electricity to their business.
According to Executive Director, Brian Louisy “we are bringing the Department of Public Utilities to the dialogue, alongside LUCELEC, the incumbent power company, this is essentially so members can glean a clear overview, receiving critical information and answers to their questions on the matter of Capacity Limits, Pricing of renewable energy and related issues”. This he sees as extremely important to Chamber members as they would want to make an input so the Chamber can provide an informed perspective to Government and contribute to the Energy Transition and reform process.
Interested people are invited to book early to secure a seat at this vital Executive Luncheon. The Chamber continues to ensure members are kept abreast of critical issues that affects their business.