St. Lucia on Wednesday cut the Value Added Tax (VAT) from 15 to 12.5 per cent, with Prime Minister Allen Chastanet saying his Administration is keeping a key campaign promise to the electorate.

“We have always believed that taxation should be a product of increased economic activity and not an entitlement of Government,” Chastanet said, while his United Workers Party (UWP) Government introduced the campaign pledge made ahead of the June 6 General Election last year.

“My Administration will continue to undertake a full restructuring of the tax system with the aim of increasing overall national consumption, reducing the cost of living and easing the burden on households and businesses,” he said.

Chastanet said it was necessary to be able to encourage people to invest in the island “we have to be more competitive” and that taxation should not be used to address economic inequality.

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