Parliament to Debate VAT Relief and Tax Changes — What It Means for You

The Parliament of Saint Lucia will meet on Tuesday, February 3rd, 2026, and buried inside the formal language of its press release is news that many businesses and individuals should pay close attention to.

This sitting is not about ceremony or speeches. It is about money, relief, and overdue taxes.

Here is what it really means, in plain language.

💸 Government Proposes Relief for Old VAT Debts

At this sitting, Members of Parliament will vote on two resolutions aimed at people and businesses who still owe Value Added Tax (VAT) from previous years.

1️⃣ No more interest on old VAT

Normally, when VAT is not paid on time, interest is added to the amount owed.

What is being proposed:

• The interest rate will be reduced from 1.25% to 0%
• It applies to VAT debts up to December 31, 2023
• The relief runs from May 2, 2024 to May 1, 2026

In simple terms: If you owe old VAT, government will stop charging interest during this period.

2️⃣ No more VAT penalties

VAT debts also attract a penalty of up to 10%.

What is being proposed:

• The penalty will be reduced from 10% to 0%
• It applies to VAT owed before December 31, 2023

In simple terms: You can clear old VAT without being punished by penalties.

🧾 Why is government doing this?

This move functions as a VAT amnesty window.

Government is essentially saying:

“Pay what you owe — and we will remove the extra burden.”

The aim is to:

• Encourage people to settle long-standing VAT arrears
• Bring overdue revenue back into the system
• Ease pressure on businesses still recovering from difficult economic years

The VAT itself is not being forgiven — but the interest and penalties are being lifted.

📜 Other Bills Before Parliament

Two important bills will also be debated:

• Public Procurement (Amendment) – changes to how government awards contracts and spends public funds
• Income Tax (Amendment) – adjustments to income tax rules (details to follow after debate)

🧠 Why this matters to ordinary Saint Lucians

This sitting signals a shift in approach.

Instead of punishment, government is prioritizing compliance and recovery. It is an acknowledgment that many fell behind not out of choice, but because of sustained economic pressure.

This window offers a chance to reset — without fear.

⚖️ Policy Focus: Relief is helpful, but reform is necessary

While VAT relief provides breathing room, it also raises a deeper policy question:

Should Saint Lucia continue relying on periodic tax amnesties, or is it time for deeper reform?

Sustainable tax policy must:

• Be clearer and easier to comply with
• Support small businesses before they fall behind
• Rely less on penalties and more on early engagement

Relief helps — but long-term fairness and transparency are what prevent arrears in the first place.

For now, one thing is clear: If you owe old VAT, this parliamentary sitting matters.