Prime Minister of Dominica and Minister for Finance, Hon. Roosevelt Skerrit has announced new reduction in duties and taxes as Government continues to work to improve the standards of living for citizens.
Prime Minister Skerrit announced these reductions during his 2021-2022 Budget Address on Wednesday July 28 2021 under the theme ‘Building on our Past, Solidifying Our Present and Securing our Future’.
Prime Minister Skerrit stated that as of August 1 2021 Government an exemption of VAT on hatching eggs will come into effect as one of the major challenges faced by poultry farmers is the sourcing of chicks.
“The poultry farmers of Dominica have been working very hard to ensure that Dominica can sustain itself with the supply of eggs and chicken. One of the many challenges is their ability to source chicks. They have had to procure and transport chicks from other countries which have proved to be at times difficult and costly. Poultry farming is a growing industry in Dominica. We are well on our way to becoming self-sufficient with the supply of whole chicken. As a Government, we must continue to support these farmers and create the environment to increase production where possible. With this in mind, I am happy to announce the exemption of VAT on hatching eggs classified under Custom Tariff Heading HS 0407.10 with effect from August 1, 2021,” Hon. Skerrit stated.
The Prime Minister noted that this exemption will result in reduced cost for the famers and increase in produce for the local market.
“This will encourage existing farmers and other interested individuals to set up hatcheries to supply chicks. Therefore Mr. Speaker, instead of importing day old chicks, we will be importing fertilized eggs and they will be hatched in Dominica which will result in reduced costs to the farmer and more competitive prices of chicken and eggs on the local market. Of course, Mr. Speaker, increased job opportunities will also be created with the operation of these hatcheries,” PM Skerrit explained.
Another major announcement made in the 2021-2022 Budget Address was an exemption of income tax on residential rent income from the 2021 income year.
Prime Minister Skerrit explained that this exemption is in a bid to welcome more investments in land and home ownership which will benefit the country in the long term.
“We are aware that many of these rental properties are owned by the salaried workers and pensioners who have paid or are already paying their fair share of income tax. They have taken their after-tax income and have invested in these properties to augment their income and pensions. This Government would like to further encourage these types of investments as they benefit not only the landlords but the country by increasing construction activity, assisting with housing our people, increasing the room stock available to visitors, creating short term and long-term employment; and as a result contribute to the growth and development of our country. Therefore Mr. Speaker, with effect from income year 2021, that is, this year, income tax on residential rent income is exempt,” he stated.
Tax exemptions were also extended to students as students or parents will now be able to claim all of the interest paid on their student loans.
“In 2002, this Government introduced a measure which allowed students or their parents to claim an annual income tax deduction for interest paid on student loans at a maximum of $5,000 per student. Mr. Speaker, we are aware that the cost of education has increased significantly since this measure was first introduced. To further invest in our students and foster education and training, Government has decided to allow students or their parents to claim all of the interest paid on their student loans each year. The measure will take effect from January 2022 to coincide with the income year,” the Prime Minister stated.
A maximum tax deduction of $8,000 on premiums paid to insure homes from the income year 2022 was also announced in the Budget Address. Prime Minister Skerrit noted that this deduction is in an effort to build financial resiliency among citizens.
“This Government has already declared that we must build a resilient Dominica. This entails building resilience at the individual level, within families and businesses. As I have mentioned on several occasions, having the necessary financial reserves in place to assist in response and recovery, for example, savings and insurances, is critical to achieving resilience. In order to assist individuals with their resilience plans, in particular ensuring that they are insured, Government proposes to allow individuals, an income tax deduction for premiums paid to insure their homes. The maximum deduction to be allowed is $8,000. This measure will take effect from income year 2022,” PM Skerrit went on to say.
Government will also offer an income tax deduction on individual or family health insurance premiums effective from the income year 2022.
“A resilient nation, requires a healthy people. Government has made significant advancements in healthcare facilities, equipment, services, and specialists at the primary, secondary and tertiary levels. As individuals, we must invest in and prioritize our personal health. This means eating right, maintaining an exercise regime, and having adequate health insurance. Government is now offering to individuals a health insurance income tax deduction. This deduction will be in respect of individual or family health insurance premiums paid, and will take effect from income year 2022. The support for health insurance is a corollary to our efforts in quality health care and service delivery,” PM Skerrit added.