Value Added Tax

The value added tax (VAT) system came into effect on 1 January 1992 and replaced a largely inefficient tax system that was redundant and easily evaded. It was initially levied at 7 percent, increased to 10 percent in 1997 but returned to 7 percent in 1999.

Value added at every stage of the production process is subject to a seven percent tax with the general calculation for remittance being:

Output tax - Input tax = Tax Paid

VAT is payable monthly with the output tax being the VAT collected on sales by the operator of the business and the input tax being the VAT paid by a company for goods or services used in the operator’s business.

If the result of the calculation is a positive figure, the operator must submit the remaining tax to the revenue department within 15 days of the end of the month, while negative balances find the operators entitled to a refund in the form of cash or tax credit paid to them the following month.

Exports are zero-rated, (VAT exempt) but they are eligible for remittances from input taxes paid in the production of the products. Also zero-rated are operators earning less than $US 16000 annually. Operators of businesses earning between $US 16000-32000 can choose between paying the normal VAT or a gross turnover tax of 1.5 percent.

A specific business tax of between two or three percent is imposed, in lieu of VAT, on the following businesses. The SBT is computed on the monthly gross receipts at the following rates:

Back to Top