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The Government of Saint Lucia is today seeking approval from Parliament to waive VAT on the building materials included in the Construction stumulus package to February 28, 2014, when the program is scheduled to end.

The date for the end of the programme, coincides with the date of the end of the derogation granted by CARICOM for Saint Lucia to waive duties on the building materials which were included in the programme.

While the full impact of the construction stimulus package is yet to be evaluated, Government’s Press Secretary Jadia Jn Pierre Emmanuel says it is estimated that the Government of Saint Lucia will forego revenue of $43.7 million and a further $12.6 million to cover the mortgage subsidy on the programme. This will bring the total cost of the Construction Stimulus Package to $56.3 million. The total revenue lost comprises custom duties in the amount of $40.3 million and refunds to importers of $2.7 million.

It is further estimated that individuals with mortgages of $180,000.00 will save approximately $47,300 in interest payments while those with mortgages of $350,000.00 can save as much as $93,000.

While data is not available from all participating banks, information from the Bank of Saint Lucia indicates that at the end of December 31, 2013, the bank approved loans totaling $42.6 million of which $30.7 million were for residential purposes.

The Consumer Affairs unit of the Ministry of Commerce is expected to issue some guidance to consumers on what price movements to reasonably expect after the package has ended.
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