Grenada’s Duty Free Concessions
I’ll be honest with you. Every time I hear politicians promise to develop and strengthen the Orange Economy, I subconsciously roll my eyes and think to myself, “Yeah? I’ll believe it when I see it…” I’m sure others can relate, no matter what part of the Caribbean you're from. As a regionalist and strong proponent of regionally integrated Orange Economies, I take notice of the promises made, the promises kept, and the broken promises.
In the fourth quarter of last year, the Grenadian government declared that the Creative/Orange Economy is one of its five priority areas for economic development. Since then, they have taken action on those words and established the Grenada Office of Creative Affairs (GOCA) to guide the work needed to develop and build the creative industry. This month, the government announced a “100% duty-free concession for the creative industry”.
This means that qualified parties (outlined below) may be entitled to 100% concessions on Common External Tariff (CET) AND Value Added Tax (VAT) for items considered “tools of trade”. Unfortunately, I was unable to find further details about the policy or a list of the items that qualify for concessions. Still, I’m sure that information will be made available to registered participants.
How does a policy like this impact the Orange Economy and creative and cultural entrepreneurs? Well, I see this as a small step toward creating an enabling environment for creative and cultural entrepreneurship. The removal of import duties on materials, equipment, and supplies can reduce the costs of doing business, increase competitiveness, and encourage local production. This can lead to the creation of new jobs, the generation of foreign exchange, and the promotion of Grenada's cultural identity, diversity, and innovation.
According to Grenada OPM’s Facebook announcement, “ The programme provides a significant opportunity for eligible creative practitioners and organisations to access the resources they need to thrive and contribute to the growth of the creative industry.” This concession also acts as an incentive for creative and cultural businesses and practitioners to register with GOCA. My curiosity regarding eligibility led me to the registration form. The form was easy to access on the website, easy to read, and relatively simple to fill out. It wasn’t overly intrusive about the business and only asked participants to indicate which sector of the Orange Economy their business or individual endeavours would fall in.
As with every policy, many aspects should be considered. Oftentimes, when businesses are given concessions, those savings aren’t necessarily passed down to the consumers. Music stores could maintain the same consumer pricing and view it as an opportunity to increase revenue, rather than passing savings on to customers. While I have no insight into the registration approvals process and criteria, there could eventually be some debate and scrutiny regarding which companies are eligible versus those that are not. I’d be eager to see the thought process behind the approvals. In addition, the announcement indicated that tax-free concessions are available for items that are considered “tools of the trade”. What exactly could be viewed as a tool of the trade? Will there be a predetermined list of items that is updated periodically in consultation with creative and cultural practitioners? These are a few thoughts that immediately came to mind as I read about this policy announcement.
Overall, this is an excellent policy, and I love seeing a Caribbean government put policy action behind their pursuit of developing and building their Orange Economies. This policy not only provides opportunities for existing creative businesses, but it also reduces barriers to entry for those entrepreneurs who are considering starting a business in the Orange Economy. I applaud the Grenadian government on this policy and look forward to witnessing GOCA execute all of its mandates.
This article originally appeared on the author’s LinkedIn.
