St. George’s, June 24, 2009 (GIS) - Government has given the assurance that the proposed Value Added Tax (VAT) will not increase the tax burden on Grenadians when it's implemented. VAT must be seen in the context of enhancing and simplifying the way business is done in Grenada, Senator George Prime told members of the Upper House during a sitting on Tuesday. Mr. Prime, Leader of Government Business in the Senate, is also Minister of Carriacou and Petite Martinique Affairs. He described VAT as a tax that will be responsive to economic activities, adding that It will only be charged on taxable activities and businesses with an income of at least EC$120,000. “Small businesses making less EC$120,000 per annum would not be required to register for VAT and therefore is not under obligation to keep record for that purpose,” Senator Prime explained. “In other words, there will be no need for such persons to report to Inland Revenue for the purposes of Vat.” At Tuesday's sitting, the Value Added Tax Bill 2009 was read and taken through the remaining stages in the Senate. VAT, which will be implemented on February 1, 2010, is expected to replace the General Consumption, airline ticket and motor vehicular purchase taxes. The Ministry of Finance, through its Inland Revenue Department and the VAT Implementation Unit, has been working to educate the general populace on the implementation of the VAT. The standard rate of VAT will be 15%, except for hotel accommodation, and dive operations which will be at a 10% rate. There will also be a zero rate on basic food items.