Dominica Budget 2022/23: PM Skerrit announces VAT reduction on electric units from August 1

PM Skerrit announced that they would increase the number of VAT-free units from 100 Kwn to 150 kWh of electrical energy provided by DOMLEC to domestic consumers per billing period. 

Dominica Budget 2022/23: PM Roosevelt Skerrit announces initiatives for Small Business
Dominica Budget 2022/23: PM Roosevelt Skerrit announces initiatives for Small Business

Roseau, Dominica: During the first meeting of the third parliament at the House of Assembly in Roseau, Prime Minister Dr Roosevelt Skerrit declared that effective from August 1, 2022, Value added Tax (VAT) on electric units will be reduced. 

PM Skerrit announced that they would increase the number of VAT-free units from 100 Kwn to 150 kWh of electrical energy provided by DOMLEC to domestic consumers per billing period. 

He noted,” The rising price of fuel has caused our electricity bills to increase sharply since January 2022. Whilst Government is not in a position to remove all of the VAT charged on electricity, effective August 1, 2022, we will increase the number of VAT-free units from 100Kwh to 150 kWh of electrical energy provided by DOMLEC to domestic consumers per billing period.” 

The measure will benefit the 14,534 domestic customers whose consumptions are currently above 100 units. In addition to this, effective August 1, 2022, there will be NO VAT on fuel surcharge charged on DOMLEC Bills. 

This means the VAT on fuel surcharge on DOMLEC electricity services will be zero-rated from August 1, 2022. This complete removal of VAT on fuel surcharge on electricity bills will apply to all categories of consumers, namely, domestic, commercial, industrial, Government and hotels. 

The measure will assist all of DOMLEC’s customers except those who are already receiving the VAT-free service. DOMLEC is working on recommissioning the PADU Hydro Plant, which has been out of operation since Hurricane Maria. 

It is expected that this plant will be operational by November 2022. This will provide further relief by reducing the amount of diesel-generated electricity and thereby reducing the fuel surcharge. 

At the end of his address for the reduction of VAT on electric units, Prime Minister Skerrit added, “In the current global climate, many governments are increasing taxes or asking their citizens to carry greater burdens. This Labour Government is not taking money from our people; we are putting money in people’s pockets. We are placing confidence in and investing in the people of Dominica. In turn, we ask only for your best effort, your kindness and courtesy toward each other, and for your support and cooperation in the national interest.”