EXCO REPORT – THURSDAY 7 MARCH 2019

Executive Council met today with one item on the Open Agenda � Tax Reforms 2019.

For this item, Members were asked to advise whether the Income Tax (Amendment) Bill, 2019 and the Property Tax Bill, 2019 should be printed and published and presented at a forthcoming formal meeting of the Legislative Council.

Members were also asked to advise whether the Income Tax (Amendment) Regulations and Customs and Excise (Approved Investor) Regulations and the Stamp Duties Order, 2019 should be made and come into force with effect from 1 April 2019.

The tax reforms support investment and were as follows:

A reduction in self-Employed and Corporation Income Tax for exporters and producers of certain goods and services e.g. fish, honey, coffee, meat, vegetables, and craftwork etc. This measure will replace the Investment Tax Credit as it is more targeted to sectors which will directly support St Helena's balance of payments

Also an Approved Investment Scheme which gives concession on import duties will be available for any new investments (by existing or new businesses) scored on the basis of how they meet a number of outcomes, such as environmental sustainability, employment and the ability to provide new goods or services on St Helena

A change to the Income Tax Ordinance (known as Gift Aid) is proposed to incentivise charitable giving over Pound 500 per annum by providing tax payers with a tax refund proportionate to their donation

An Empty Commercial Property Tax to encourage owners to let out their empty commercial property. Empty properties are still a cost to SHG; SHG maintains the infrastructure (such as roads) servicing the property, and makes available police and fire services. It is noted that the empty commercial property tax will not force owners to rent their commercial properties; should property rental not be desirable, then the tax can simply be paid. Bigger properties will attract a higher charge

In order to help first time buyers get onto the property market, Executive Council agreed changes in Stamp Duty. Currently there is a flat 2.5% rate of stamp duty applied to all transactions and it is proposed to exempt first time buyers on stamp duty on the first Pound 100,000 of the value of the land or property they purchase; exempt stamp duty on properties up to the value of Pound 10,000, introduce a stepped charge for higher value properties and an additional 2.5% for those purchasing a second home

In their deliberations, Council took into account feedback from the recent consultation on the proposed reforms. They also noted that the consultation suggested a charge for empty second homes should be introduced. It was agreed that this would be considered next year, and it would be the subject of further consultation.

Source: St Helena Government

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