An informative and highly interactive engagement, organized by the St. Lucia Chamber of Commerce, Industry and Agriculture between the Ministry of Finance, Economic Development and the Youth Economy and the members of the Chamber took place on June 6, 2023, on the 5^th Floor of the Financial Center Point Seraphine.  The objective of the engagement was to discuss key elements of the recently announced Budget Measures (Prime Minister’s Budget Statement 2023), including the Health and Security Tax, the Tobacco Levy, VAT Relief on selected construction material and incentivization of installation of Photo Voltic systems.

Led by the Permanent Secretary in the Department of Finance, of the Ministry of Finance, Economic Development and Youth Economy, Mr. Francis Fontenelle, along with the Head of Research and Policy, Ms. Jemma LaFeuille. The Ministry presented and overview of the country’s economic performance and forecasts, that laid the basis for the 2023/2024 Estimates of Revenue and Expenditure and the accompanying Budget Statement by the Honorable Philip J Pierre, where key policy pronouncements were enunciated.    

Some of the key points articulated included, the Budget Deficits, the recent and projected growth rates (GDP) (12% in 2021, 18% in 2022, 5.3% for 2023 and 6.3% for 2024). Debt to GDP Ratio moving from 95% in 2020, down to almost 68% in 2022 and forecasted to approach the target of 60% by 2035 set by the Monetary Council which is the highest decision-making body of the ECCB.

The 2.5% Health and Security Levy, expected to recoup some EC$35 million, it is proposed to be placed upon the CIF value of imports, at the domestic level the proposal is that it be placed on services. Goods and services that are exempt or zero rated will not attract the levy, additionally, food stuff, selected pharmaceutical items, selected construction material and selected services will be exempt.

Firms that fall below the VAT registration threshold will not be expected to pay the Levy. The Levy is expected to be collected at the port by the Customs & Excise Department, while domestic trade will make that payment to the Inland Revenue Department, when making their monthly VAT filings.  The increased Tobacco Tax will be paid at the usual source, while the Ministry of Commerce will be charged to monitor the application of the construction material waiver.

The Business Community remained fully engrossed and attentive throughout the engagements, asking many questions, offering suggestions, and making some inciteful contributions on the approach that could be pursued in application of the measures.

The Chamber highlighted concerns over the added administrative and financial burden this measure would introduce, the direct impact on firm's bottom line, the dampening effect on consumption, the inflationary impact in an already high inflation environment, as well as the impact on the IT Sector as an enabling support sector.

The Chamber also strongly called for Government to conduct public education and public relations exercises to inform and prepare the public for the consequent price increases some of the measures would cause. Chamber Executive Director Brian Louisy, specifically spoke to the public backlash that businesses are likely to face with price escalation which they had no control over and being unfairly accused of price gauging.

Another point of caution raised by Louisy was that appropriate monitoring and measuring methods need to be utilized to determine pass through of reduced taxes, as the inflationary environment may cause a situation where the prices of goods increase due to cost of goods rising even when taxes are reduced or removed.

Individual members were able to raise concerns and ask pointed questions, which the Ministry of Finance was able to adequately respond to, and where unable, agreed to follow up with responses in due course.

The meeting highlighted the need for more dialogue and engagement between the public and private sectors, with P.S. Fontenelle confirming the Prime Ministers’ intention to join the next forum, and the Ministry’s agreement to meet with the Chamber on economic matters, on a regular basis moving forward.

The Chamber urged the Ministry of Finance and Economic Development, to utilize a broader based development approach, that would allow national objectives to dictate other micro and fiscal policy, rather than the piece meal response to sector opportunities and challenges. The Chamber also reiterated its commitment to work with the Public Sector, be frank and open with sharing its concerns, and being prepared to grasp opportunities for joint action.

The meeting concluded with the Ministry promising to share their presentation, providing ample notice of the start date for the implementation of new measures, and to continue to dialogue with the Chamber and the wider private sector, on the way forward with the implementation of the Budget Measures.

Ministers’ intention to join the next forum, and the Ministry’s agreement to meet with the Chamber on economic matters, on a regular basis moving forward.

The St. Lucia Chamber of Commerce Industry and Agriculture continued its longstanding practice of providing members with valuable information aimed at improving the competitiveness of members through strategic and valuable information services.

The 2023 Resource Agency Forum, brought together in three power packed hours information on financial and technical resources members can access from well-endowed regional development agencies. Caribbean Export manages of a multi-million-dollar assistance programs funded by the European Development Fund among others, participated and shared insight into those resources and how they could be accessed. The CARICOM Development Fund (CDF) was also present to speak to the new and innovative credit risk abatement facility focused on renewable energy and energy efficiency programs. CDF did not stop there and went on to speak to their extensive program of support for Article 164 firms that had recently been launched.

Firms in attendance were kept busy taking copious notes as informative and critical information continued to be shared by Export St. Lucia and the Bank of St. Lucia and the hard working locally based, St. Lucia Development Bank. While the Caribbean Development Bank was not able to present on the afternoon as schedule, participants are guaranteed a CDB focused session in the next few weeks that is expected to be as informative and valuable as the other presentations made on the 1st of June 2023.

Invest St. Lucia the main sponsor of the event stressed the institutions commitment to serving businesses on the island equally as effectively as they serve interested Foreign Investors with a suite of bespoke services that impact the ability of local businesses to compete. grow and expand their positive economic and social impact on the island.

The St. Lucia Chamber of Commerce's Executive Director pointed out that the Chamber has long recognized that lack of information in an easily digestible manner was one of the main shortcomings in the business and investment ecosystem and the Chamber has positioned itself to cause this shortcoming to be addressed by meeting this need itself or causing others business support organizations to respond and deliver those services. Mr. Louisy spoke to the Chamber's program of "How to Access Incentives, Concessions and Support" that has led to a dynamic and effective community outreach by the Ministry of Commerce in recent times.    meet that was eafternoon of  /Unioof has arranged a most important engagement with the Ministry of Finance to discuss and get some insight on the announced Health and Security Tax. The engagement takes place on 6th June at 10:00 a.m. at the Financial Services Center Point Seraphine.

While the Prime Minister in his Budget Statement has indicated that the tax will not be applied to food items, very little other details were disclosed. Thus, the Chamber has organized this engagement to help members (1) Understand the Measures announced, (2) Make an input into the implementation modality, (3) offer insight into the possible ramifications of the measure and offer mitigating approaches, (4) allow Government to benefit from the perspective and insight of the business community who will be in the front line of the measure's implementation. (5) take the opportunity to engage the Ministry of Finance on any matters incidental to the discussion.

The Chamber remains determined to ensure that Members have the inside edge on policy regulations and laws through an effective and structured dialogue with Government at all times.

This is a member only engagement and you are encouraged to register early.

Register by Clicking this link!!! https://stluciachamber.wildapricot.org/event-5291718

The First Partners Meeting for GEW 23 was hosted by the Chamber on May 17th, 2023, a full seven months before the actual week, i.e. November 13-19 2023. This is the seriousness and intent of the Chamber to make GEW23 a grand affair to celebrate and promoted the entrepreneurship spirit on island.

The next meeting is scheduled for June 21st, 2023 and at the meeting the Chamber will start to share some of its ideas as to what specific activities it will take the lead responsibility for and received ideas and commitments as to what activities Partners will be hosting themselves.

The approach traditionally taken is that players in the Entrepreneurship Space and supporters of Entrepreneurship join in the celebration as Partners who sponsor and host events and activities during that week. From talks with staff, to promoting entrepreneurship or GEW by placing logos on vehicles and on company property and premises to competitions and showcases all fit into GEW.

GEW seeks to inspire, engage mentor and connect entrepreneurs and activities during GEW seek to do so. Please join us as we create the next generation of businesses, problem solvers and chamber members.

For more information on how your organization can get involved or for more information on Global Entrepreneurship Week 2023, kindly contact the St. Lucia Chamber of Commerce, Industry and Agriculture via telephone at 452 3165 or via email at gewslu@gmail.com. All interested partners are welcomed!

On May 23^rd2023, the Ministry of Agriculture, Fisheries, Food Security and Rural Development hosted a consultation on the Pork Sector to which the Chamber was invited.

According to the Ministry “The local Pork industry is acritical livestock subsector with thin the agricultural sector. Post Covid-19, in 2021, the production expanded by 26%, resulting in revenue of $4.7 million. Notwithstanding, the cost of production of pigs continues to increase post pandemic and more so owing to supply chain issues and increases in the cost of inputs and fuel prices brought on by the Russia-Ukraine war. The Ministry of Agriculture Fisheries, Food Security and Rural Development has therefore completed a validation exercise on the cost of production for local pork and would like to present its findings to its stakeholders in the sector.”

The Presentation by the Ministry of Agriculture proffered that farmers should receive $12.61 per pound of local pork (live weight) if they wished to enjoy a 25% profit margin and $14.12 if the wished to enjoy a 40% profit margin. Currently local pork is sold live weight at $6.50 to $7.50 a pound live weight, though the Pig Farmers Cooperative Society announced an increase in price of local pork in December 2022.

St. Lucia Pig Farmers Cooperative Society Position.

The St. Lucia Pig Farmers Cooperative Society argue that the cost of feed had risen significantly along with other costs of production. They point out that the cost of all other food stuffs has risen, and persons should therefore not be surprised that the price of pork would ultimately have to increase.

The Cooperative also advances, the view that there is economic and social value in having a livestock sector including food security issues, employment and reducing rural urban drift. The Cooperative also argued that the quality of the product was superior to the imported as they did not use antibiotics and other growth hormones. They also point out that the US and other developed countries give their farmers subsidies making their prices lower than they otherwise would have been accounting for the lower cost of pork from these countries.  

The Hotel and Tourism Association indicated that there was need for improved quality of product that was delivered to the importer. They argued that not all farmers were at a good standard and there was need for standards for the sector. They also pointed to the need for the farmers to provide the required cuts to the importer as the product provided was most times not chilled or frozen after they were killed only sides were provided. The SLHTA indicated that they were prepared to work with pig farmers, but the price increase was too steep. Their represented argued that the market would not pay such a high price for local pork.

The fact that there was in place a local purchase requirement for pork was highlighted as one of the ways the importers supported local farmers. This Local purchase requirement results in importers of pork need to purchase 67lbs of pork locally for every 100 lbs of pork imported (40%) and at such a high price the profitability of trading in pork would be dramatically reduced combined with challenges to sell local pork at that price is constrained by consumers ability and willingness to pay.

The Chamber having not been privy to the discussions before the Consultation, and not invited to make a presentation, requested some clarifications on data presented. The Chamber also informed that the institution would wish to review the presentation made on the cost of production, consult with its members and thereafter it will be able to provide feedback.

The Chamber is at this time concerned that such a significant price increase of over 45% would place significant pressure on consumers and would more than likely result in a significant drop in demand. This is particularly significant in the current environment of high prices and inflation. The Chamber notes that the demand for local pork is a derived demand and importers cross subsidize within their operations to encourage purchase of local pork, drop in demand due to price increases could therefore be a double-edged sword for the farmers.

While the Chamber understand the call increases in the price of local pork from farmers, it remains of the view that any increase in the price of local pork should be supported by a dynamic and widespread public relations and marketing program.

The Chamber will continue to work with all stakeholders as we seek to advance the interest of all business on the island by meeting the needs of customers.