No VAT on Fancy Mas Costumes for 2010 Carnival

Press - by Lincoln Depradine
June 25th, 2010

"Carnival bandleaders and revellers are breathing a sigh of relief."

They no longer have the worry of having to pay Value Added Tax (VAT) on fancy mas’ costumes and for jouvert bands for this year’s carnival celebrations.

Following the carnival celebrations, there will be an examination of what, if any, revenue that government would have lost by not collecting Value Added Tax from masqueraders, and whether the no-VAT policy will remain in place in future years.

 The VAT Unit of the Ministry of Finance made the decision to forego VAT on costumes after a June 18 meeting facilitated by Junior Culture Minister, Senator Arley Gill. It was attended Grenada Carnival Committee (GCC) chairman, Colin Dowe, as well as by three representatives of the VAT Unit and a four-member delegation from the Grenada Mas Bands’ Association (GMBA).

 At the meeting, the GMBA proposed that for 2010, “in the first instance,’’ bands should not charge VAT on the sale of costumes for fancy mas.

 In formally responding to the proposal in a letter dated June 22, Permanent Secretary in the Ministry of Finance, Timothy Antoine, said government had agreed that the GMBA and jouvert band leaders “will not charge VAT on the sale of costumes for fancy mas and jouvert.’’

 However, the letter added that “registered businesses participating in the Monday Night Mas are required to charge VAT on the sale of Monday Night packages and remit VAT to government.’’

 The concessions granted by the Ministry of Finance included certain conditions specified in the letter from Mr. Antoine. Among them were:

•  The requirement that all mas bands register with the Inland Revenue Division and provide proof of registration to GCC before receiving the annual government subvention;
•  The GCC commits to working with the Mas Bands’ Association to ensure adequate accounting records are maintained;
•  The GCC, Ministry of Culture and the Inland Revenue Division  agree to engage the Mas Bands’ Association and other relevant stakeholders in understanding their obligations as it relates to taxation with a view to fostering voluntary compliance with all tax laws;
•  As a basis for going forward, the Inland Revenue Division and the GCC should engage the Mas Bands’ Association and relevant stakeholders in determining their treatment for the purposes of VAT no later than March 2011, to ensure timely decision making and planning for 2011 carnival activities.

 GCC Chairman Dowe said the carnival committee was “extremely pleased’’ with the Ministry of Finance’s approval of the GMBA’s proposal of no VAT on the sale of costumes to masqueraders.

 Mr. Dowe said he was also delighted with the ministry’s decision because of his belief that “all infantile industries must be protected.’’

“We view carnival and all entertainment in Grenada as an infantile industry,’’ he explained. “If government resources were going to be put into a carnival bailout; if government resources were going to be put into the attraction of airlift; it would be counterproductive to then compromise the very product that we are inviting people to come in and be a part of. Recognising the importance of a successful carnival, and having Spicemas as the premiere cultural event in Grenada, the Ministry of Finance has said that the moratorium for 2010 has been approved.’’

For this year’s carnival, the GCC is hoping that there’ll be a number of calypso tent shows. “Monies will be disbursed to the calypso associations to start the practising that will be necessary to have shows,’’ said Mr. Dowe. “There won’t be full disbursements as yet. There is continuing conversation as to what that total disbursement would be.’’

Subventions to calypso association and fancy mas bands will be made Thursday and Friday, June 24 and 25.

The 2010 carnival celebrations, which were officially launched June 12, culminate August 9 and 10.