The Senate has approved a government resolution granting a two-year exemption from Value Added Tax (VAT) on aircraft and watercraft purchases, a measure the administration says is intended to enhance regional connectivity and tourism competitiveness. The motion, passed this week in the Upper House, has sparked debate between government and opposition senators over its accessibility and long-term impact.
Leader of Government Business, Senator Guibion Ferdinand, said the exemption forms part of Saint Lucia’s broader strategy to address long-standing transportation challenges across the Caribbean.
“During some of our very important events, for example, Jazz, Carnival, even Creole Heritage, we find there quite a few challenges with people moving within the region,” Ferdinand said.
“It is actually sometimes a lot easier for someone to travel to Miami than to be able to travel to the islands north of the Caribbean. And it is important that we cause for there to be some kind of incentive to cause more entities and people to invest in regional travel.”
Ferdinand noted that limited inter-island connectivity continues to hinder tourism and trade, adding that the government hopes the temporary VAT relief will encourage private investment in air and sea transport services, which are essential for regional economic integration.
However, Opposition Senator Elisha Norbert raised concerns that the two-year timeframe could exclude smaller investors or entrepreneurs who may not have the financial capacity to benefit from the exemption.
“What about those who may not have enough time within the next two years to put money together to take advantage of this?” Norbert asked. “I think if the VAT is unbearable, as the government has realized — hence they’re asking for this resolution to be passed — then maybe we should come together and find another way to allow for the purchase of equipment that will be used for travel to be VAT-free.”
Norbert suggested that while the measure could stimulate activity among established businesses, more inclusive mechanisms are needed to ensure that the benefits extend to a broader cross-section of the population.
The VAT exemption, which will run until 2027, is part of the government’s ongoing effort to strengthen Saint Lucia’s connectivity with its Caribbean neighbors and attract new investment into the tourism and transportation sectors.