COMMENTARY: VAT or turning point?

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COMMENTARY: VAT or turning point?
Melanius Alphonse
Melanius Alphonse

The jitters that surround local business readiness for the implementation of value added tax (VAT) in Saint Lucia are a potpourri of fiscal and social maladies, which may well have far reaching consequences for our nation.

October 1, 2012, the implementation date of VAT, is bringing to the surface a number of business registration issues, administrative, legal and operational challenges that speaks loudly to the preparedness of the business community and the rest of Saint Lucia.

There is a hefty cost in readiness and compliance; none of which may have been a part of the budgetary and expenditure expectations of most of the business establishments in the country.

Financial hardship or not, the strong arm of big government to tax and spend is at work.

Like it or not, the SLP administration mandates that you whip yourself into compliance.

Business owners will have to decide on the financial facts, and not political spin, in order to answer the following questions: Is my business below or above the threshold of EC$180,000, and is it worth the additional cost of doing business in Saint Lucia.

Sadly, this has begun. The hotel sector, the biggest debtors to the state, has began to terminate employees; while manufacturers, private enterprise and citizens contemplate their next best option to 15% VAT, mounting debt and a grim domestic economy.
The economic decisions to date by a spendthrift SLP administration, have focused more on creating jobs for the boys, growing the government and mending “fraternal alliance” with the communist state of China, than on the economy and the people of the Saint Lucia.

Meanwhile, the downward spiral of the domestic economy is crumbling around structural flaws that have not been stabilized with medium term strategies, aided by external pressures that seem to have rendered our nation incapable of handling.

Undoubtedly, the rush to 15% VAT from a political directorate that claimed to be the champions of the common man but has, upon assuming office, quickly thrown the poor and working class under the bus, is proof enough of how much they really care about the plight of the poor.

And so, action tells the story, with the implementation of 15%VAT in Saint Lucia. It is more than likely a deterrent that will prolong the delivery of prosperity to a vast number of the poor and working class citizens of our country.

It will deepen the part-time jobs phenomenon called STEP and frustrate the 21.2%unemployed in the country even further.

Increasingly, one would have expected greater consideration for the less fortunate at the bottom of the economic ladder, but it now seems as if their long journey of aspiring to move up may have been dashed.

They are trapped deep down in the abyss of despair, an unexpected turning point to misery.

Clearly, this is unreasonable and reprehensible of SLP leadership and a spendthrift administration that is void of a plan to advance the people of Saint Lucia, beyond the outdated governance model of massive borrowing and spending.

Some have argued that it is more of the same in terms of the kind of strategies that nibble around a political system that favour a few, and which thrive on increasing public debt and public spending, while poor families struggle to make sacrifices in order to satisfy a big government appetite that eclipses Saint Lucia’s capacity to evade a turning point anytime soon.

But, regardless of what any minister of government in Saint Lucia may pontificate, the external analysis is a painful fix that will come sooner rather than later.

The prognosis indicates that personal and public debt be brought under immediate control, and that the budget deficit be restricted in order to avoid falling over the fiscal cliff.

Saint Lucia is in serious need of a debt ceiling, which will limit the amount of money that this government and all future governments can borrow.

Already, I can hear the response from the government and their overzealous supporters. “Keep quiet man. The implementation of 15%VAT will take care of things. We will have enough money to pay down on our debt, and Better Days will flow like milk and honey in the country.”

Sadly, the truth is so very clear for all to see.  The implementation of 15% VAT will increase the cost of living, hurt the poorest among us; and without hesitation drive the next generation of Saint Lucians into greater poverty.

We now stand, at the crossroads of love of party and love of country. You decide!

Melanius Alphonse is a management and development consultant. He is an advocate for community development, social justice, economic freedom and equality; the Lucian People’s Movement (LPM) critic on youth initiative, infrastructure, economic and business development. He can be reached at [email protected]

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