The cash-strapped Keith Mitchell-led New National Party (NNP) administration is going after the wealthy landlords in the country.
Parliament on Friday passed legislation that mandates all persons who provide accommodation that earn EC$120,000 or more per year will have to register and pay 10% Value Added Tax (VAT) no later than August 01.
The amendment is aimed specifically at those who provide “accommodation in a building, or a group of buildings (including the structures within the cartilage thereof) that constitute a hotel, motel, boarding house, guest house, villas, an inn, student housing dormitories, apartment complex, private house or a room or similar establishment in which lodging is regularly or normally provided for a daily, weekly, monthly, or other periodic consideration”.
The amendment will also affect those involved in the marina business as the legislation makes mention of a caravan, houseboat, camping site, boat, marina berth or similar place, on terms commensurate with those of landlord and tenant if the accommodation is provided to an individual, (alone or together with other individuals)”.
The amended legislation was tabled by Finance Minister. Prime Minister Dr Keith Mitchell and passed in the Lower House of Representatives.
In putting forward the motion, the Prime Minister pointed out that every Grenadian must contribute to the country’s development.
He said the amendment to the existing VAT is meant to plug the holes within the system that allowed some persons and businesses to get away without paying their share of taxes.
“If you are making thousands of United States dollars, you have to pay your fair share,” Dr. Mitchell told Parliament.
All accommodation suppliers will have to register before 31 July, as the law is expected to go into effect as of August 1, 2014.
Failure to register the accommodation with the VAT Unit can result in penalties that include fines in excess of EC$5,000.