Taxes up on sugary beverages, alcohol, tobacco
The medicinal cannabis industry in St Vincent and the Grenadines is projected to generate revenue of at least EC$5 million in 2019.
Camillo Gonsalves, this country’s finance minister gave the 2019 Budget address in Parliament yesterday. And he said that the medicinal cannabis industry will begin to produce limited revenue in its first year.
“In late 2018, the government enacted a suite of legislation paving the way for the establishment of a viable Medicinal Cannabis Industry in St Vincent and the Grenadines. It is anticipated that the establishment of the Authority will make substantial additions to the revenue through the various licences and export taxes,” Gonsalves said.
“However, given the administrative and logistical steps still to be completed this year, total revenue resulting from the establishment of the Medicinal Cannabis Authority in 2019 is conservatively estimated at $5 million.”
Increases in tax on tobacco products, sweetened beverages and alcohol are also expected to generate revenue for this country in 2019.
The finance minister said that tax on cigarettes containing tobacco will increase from $1.55 per 100 sticks to $2.75 per 100 sticks and tax on unmanufactured tobacco will increase from 6 per cent to 10 per cent.
For cigars, excise duty will increase by 6 percentage points, from 14 per cent to 20 per cent. Other manufactured tobacco and tobacco substitutes will increase from 6 per cent to 10 per cent and in the ‘other’ category, tax will increase from 12 per cent to 18 per cent.
These increases are expected to generate $0.5 million.
In the sweetened beverages category, tax will increase from 10 per cent to 20 per cent on water, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured. Tax on aerated beverages will also increase from 10 per cent to 20 per cent.
Approximately $2.4 million in revenue is expected to be generated from increases in this area.
For undenatured ethylalcohol of an alcoholic strength by volume of 80 per cent or higher, the rate will increase by almost 11 per cent and tax will increase by 20 per cent on Brandy, Whiskies, Gin Geneva, Vodka and rum in bottles of strength not exceeding 46 per cent.
This is expected to yield approximately $0.8 million.
Gonsalves also said that the 2019 Budget proposes a small excise on fuel.
“Notwithstanding increased government spending on road repairs and rehabilitation, as evidenced in this year’s Estimates of Revenue and Expenditure, the calls from the public for even more spending on the roads are quite evident,” he said.
“Accordingly, in an effort to meet these demands for more spending on roads, health care and environmental protection, the government intends to increase the excise on gasoline and diesel…” he said.
The current rate on gasoline is $2.50. This will increase to $3.00 while gas oils (other than diesel oil) will increase from $1.50 to $2.10.
Gonsalves said that these increases are expected to generate a revenue of $4.2 million.
Despite the increases in these areas, the government intends to provide concessions on construction-type vehicles.
The finance minister, in his presentation, said that the government shall reduce excise tax on trucks by 5 percentage points; from 60 per cent to 55 per cent.
And for construction-type vehicles that have been affected by the ban on used vehicles, 12 years or older, the government will grant duty-free concessions on dump trucks 3 tonnes and above and other construction vehicles from 60 per cent to 50 per cent.
“These two measures will provide useful incentive for increased private sector investment in the construction sector to complement the government’s public sector investment programme. With the approaching construction boom across St Vincent and the Grenadines, we encourage contractors to invest in durable, high-quality trucks and machinery,” Gonsalves said.
The House of Assembly resumes today at 9 am with Dr Godwin Friday, the opposition leader making his presentation on the Budget.