The 2016 /2017 national budget was presented in July 2016 under the theme “Building A More Resilient Dominica”. Several Investment Incentives were highlighted as part of the presentation; this is expected to create much-needed growth in the economy. They include:
Increased In The VAT Registration Threshold
The VAT Registration Threshold has been increased effective 1 September 2016 to EC$250,000. This will be the first step in making it easier for smaller businesses to be tax compliant. The VAT registration threshold was increased to EC$250,000 from EC$120,000 to reduce the number of businesses required to register for VAT. This new threshold will apply to all types of businesses that are engaged in the supply of taxable goods and services.
As a result, businesses that are now registered for VAT and which will fall below the new proposed threshold will be deregistered. The Value Added Tax was first introduced in Dominica in March 2006.
Proposed Amendment To Income Tax Act, Chapter 67:01 To Take Effect On January 1, 2017
The aim of the Amended Act is to persuade the hoteliers’ to improve and upgrade the quality of the rooms, and it is expected that any expansion of a hotel property should result in improved quality rooms. The amended Income Tax Act will allow Cabinet to approve tax holidays of up to 10 years, where hoteliers have made substantial upgrades to their existing hotel properties. This would include extensive remodelling, renovation or refurbishment works. Further, where a tax holiday has been granted in relation to the extension of an existing hotel, for the purpose of calculating the amount of income to be exempt, Government proposes to exempt the income that is directly related to that extension. This means that these hoteliers will be allowed to recover their costs, by way of an income tax expense deduction of twenty (20) percent for each year, over a period of five (5) years. This measure will take effect from 1st January 2017.
Special Loan Facility For Investment In Tourism
The Dominica Hotel & Tourism Association identified the need for low-cost financing as one of the most critical matters for its members. The Government has therefore established a special loan facility to finance the upgrading and expansion of existing hotels and restaurants on the island.
An amount of $15.0 million from the proceeds of the Citizenship by Investment Programme has been deposited with the AID Bank for on-lending to the hotel sector. The Government has decided based on consultations with the hoteliers to set the interest rate at 3.0 percent with a grace period of one year.
Destination Marketing – Tourism
The Ministry of Tourism will receive an additional $2.2 million for site enhancement and the expansion of the Community Tourism product. This will enhance the attractiveness and quality of Dominica’s product.
The marketing efforts of the Ministry will receive a further boost, to its marketing budget, from $6.0 million to $8.5 million, in line with the Tourism Master Plan.
- By: Grace ¦ On: 11th , Jun 2020COVID-19 has devasted lives all over the globe. The speed at which the virus inv... Read More
- By: Grace ¦ On: 6th , Jun 2019Like most places in the world, Dominica has realized that it cannot be business... Read More
- By: Grace ¦ On: 21st , Mar 2019A few incidents over the last few years have left me wondering whether expecting... Read More