Come July 1, 2025, Saint Lucians can expect to see lower prices on essential goods as the government moves to eliminate the Value Added Tax (VAT) on more than 70 items, primarily foodstuffs.

Pierre was careful to add that while the government has no control over the import cost of goods, it can influence the final retail price through tax relief. The zero-rating of these items will remove the existing 12.5% VAT, which the government previously collected at the point of sale.

“Even if the cost [of the items] coming into Saint Lucia goes up, the price should still go down by 12.5%...these items that were exempt, all of them are going to be zero-rated,” he said.

However, he cautioned that price reductions on previously exempt items may be less predictable, given the absence of a tax component to eliminate. “There ought to be a reduction in the price on the VAT-exempt items also, but we cannot say that for a fact,” Pierre clarified.

This move is a budget promise and comes a month after the fulfillment of another budget pronouncement: the removal of service charge on the import of goods that are price-controlled at the ports of entry, and the halving of the service charge levied on regional flights.

The Prime Minister indicated that these measures are in an effort to ease the cost of living and make business and travel more affordable. These moves also follow what Pierre has touted as three years of continuous economic growth in Saint Lucia, a feat not seen for decades.

The list of zero-rated goods is expected to include a range of staple food items and basic necessities.