Budget 2022-2023: PM Roosevelt Skerrit announces increase in VAT-free electric units in Dominica

Dominica: Prime Minister Dr Roosevelt Skerrit, while presenting the million dollar budget 2022-2023 to the parliament of Dominica, announced that Value Added Tax (VAT) on electricity would be reduced, effective from August 1, 2022 (Monday).

The country witnessed the rising fuel price, which caused electricity bills to increase sharply since January 2022. So, the government has decided to increase the number of VAT-free units from 100 KWh to 150 kWh of electrical energy provided by DOMLEC to domestic consumers per billing period, effective from August 1. As of now, the government is not in a position to remove all of the VAT charged on electricity.

He highlighted that as per his knowledge, this measure would benefit the 14,534 domestic customers whose consumptions are currently above 100 units.

In addition, from August 1, 2022, there will be NO VAT on fuel surcharge charged on DOMLEC Bills, which shows that the VAT on fuel surcharge on DOMLEC electricity services will be zero-rated from the next month.

The complete removal of VAT on fuel surcharge on electricity bills will apply to all categories of consumers, such as domestic, commercial, industrial, government and hotels. The measure will assist all DOMLEC’s customers except those already receiving the VAT-free service.

DOMLEC is working on re-commissioning 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.

In the current global climate, many governments are increasing taxes or asking their citizens to carry more significant burdens.

He highlighted, “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 your support and cooperation in the national interest.”