The idea of an increase in National Insurance Corporation (NIC) tax from five to 7.5 percent is not being supported by Executive Director of the Saint Lucia Employers Federation (SLEF) Joseph Alexander, as he believes it will put too much pressure on employers, especially at a time when they are already facing a difficult economic situation.
Former Chief Medical Officer Dr. Stephen King, on a recent talk show, had endorsed some new measures being considered to boost the health care sector and make primary health care less prohibitive for the underprivileged.
The increase in NIC contributions and the institution of a “sin tax” – an excise tax normally levied on activities or goods considered physically or morally harmful, such as cigarettes and liquor- were two of the suggestions supported by Dr. King.
While he is all for the introduction of a sin tax, the SLEF executive director said increasing the NIC contributions may not be a good idea.
“For the simple reason, [that] whenever there is a contribution [that] needs to be made, it always seems to come from the employers because as you’re aware, the employer will now have to put an extra two or two-and-a-half percent [toward NIC contributions],” Alexander said.
“…So I am not against employers contributing, I just feel that too much is being asked of employers at this difficult stage with the current economic condition.”
With regard to the sin tax, he said: “I believe, and Dr. King said it, that there should be a tax on goods especially the sin tax…cigarettes etcetera. And since everybody is going to benefit I think an overall tax on produce would be a better way to go so everybody will contribute in their own little way, because it is quite a lot of money that will be required to run those two hospitals.”
Proceeds from the sin tax and increase in NIC contributions would go towards the health sector into which government is already contributing $108 million.