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Trinidad and Tobago to Reduce and Broaden VAT

 Not any more.

A 15% Value Added Tax, or VAT, applies to many goods and services in the Republic of Trinidad and Tobago. Books, however, have long been subject to a zero-rating VAT in the Republic.

The Value Added Tax Act lists as zero-rated the following:

“Books namely literary works, reference books, directories collections of letters or documents permanently bound in covers, loose-leaf books, manuals or instructions whether complete with their binder or not, amendments to loose-leaf books even if issued separately, school work books and other educational texts in question-and-answer format with spaces for insertion of answers, children’s picture and painting books, exercise books.”

Brochures, pamphlets and leaflets, news- papers, magazines, journals and periodicals, photograph and stamp albums are excluded from the zero-rating.

Lawmakers are now planning to extend VAT to books and computers. In the Budget Speech 2016 (presented October 5, 2015), Minister of Finance Colm Imbert proposed improving efficiency in collection and broadening the base “by reviewing and adjusting exemptions and zero-rated items which are associated with non-essential or luxury items, and which are not critically important to the livelihoods and basic cost of living of our citizens.” He proposed the following changes:

  • Broaden the base to include many products
  • Reduce VAT from 15% to 12.5%
  • Increase the threshold for VAT registration from $360,000 to $500,000

These changes were initially scheduled to take effect at the start of the year but are now planned for February 1, 2016. The rate is expected to drop to 12.5%, the registration threshold will increase, and VAT will be extended to more than 7,000 basic products — among them books and computers.

The proposal to extend the tax to books and computers has sparked criticism. Both the Chaguanas Chamber of Commerce and local historian Bridget Brereton have voiced concerns that a tax on books and computers will threaten literacy, including technological literacy. A statement against the tax by the Chamber reads, “This cannot be the way forward in a society where low levels of literacy can be cited as contributing factors in crime, poverty, and social mobility.”

Learn more about VAT and simplify VAT compliance with Avalara VATlive.

photo credit: BRITISH COLUMBIA 1971 MUNICIPAL EXEMPT plate via photopin (license)

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.