St Lucia extends tax concessions on hybrid, EVs
CASTRIES, St Lucia:
The St Lucia government has announced an extension of the reduced import duty and excise tax rates, specifically for hybrid and electric vehicles (EV) to August 30 next year.
A statement from the Department of Finance said that the decision to extend the reduced tax rates aligns with the objectives of the Organisation of Eastern Caribbean States Commission-led Solar Challenge ‘Race to the Sun’, as well as the goals and objectives of the recently approved National Energy Policy (2023-2030).
It said that the extension is also in keeping with the island’s updated Nationally Determined Contributions, emphasising the transport sector’s significance in mitigating St Lucia’s greenhouse gas emissions.
“Recognising the pivotal role of tax incentives in encouraging the adoption of hybrid and electric vehicles, while simultaneously curbing the country’s reliance on fossil fuels through the electrification of energy demand which dovetails the greening of the island’s electricity grid, the Cabinet believes that maintaining lower tax rates will promote the uptake of environmentally friendly vehicles,” the statement said.
It said that the aim is to reduce emissions within the transport sector.
“To address stakeholder concerns and prevent a potential increase in effective taxes on hybrids and EVs due to the waiver’s expiration, the Department of Finance proposes to retain the existing excise and duty rates, ranging from five to 110 per cent import duties from December 1, 2023, to August 30, 2024.
“This extension will afford the department sufficient time to implement the new HS (HS 2022) and prepare for potential revisions to the excise and duty system for all vehicles, which will be presented for Cabinet’s consideration,” the statement noted.
It said, moreover, to bolster efforts towards reducing carbon emissions and achieving energy independence, the Departments of Finance and Infrastructure “have been diligently working to ensure that the upcoming introduction of the new HS classification system incorporates specific categories for different classes of hybrids and EVs.
“The intent is to propose a comprehensive revision of the excise and duty system for all vehicles in alignment with these classifications,” it added.