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The United Workers Party’s (UWP) recent campaign promise to reduce and ultimately remove the Valued Added Tax (VAT) has been met with mixed views, and is now being dubbed by Prime Minister Dr. Kenny Anthony as an “opportunistic and bizarre” proposal, which could prove detrimental to the local economy.
The Prime Minister said while Political leader of the United Workers Party (UWP) Allen Chastanet made the announcement that VAT is “dreaded,” he told an audience at a town hall meeting on Wednesday evening that “VAT is the best and most effective tax in the world. No argument”.
Dr. Anthony is therefore questioning Chastanet’s position on the issue, stating that that speaks to the inconsistencies in his statements.
He said in 2015/2016, Saint Lucia earned $346.37 million dollars from VAT. This revenue pays: nurses, doctors, teachers, police officers, civil servants, and repays debt. For every 1 percent reduction in VAT Revenue, the country loses $7.0 million dollars.
“The question then is this: what are the new “creative” measures, what are the new taxes that Allen Chastanet plans to impose on the people of Saint Lucia to make up for this staggering loss of $ 346.37 million dollars in revenue?’ he questioned.
Dr. Anthony recalled that in 2007, former Prime Minister Sir John Compton announced in his only Budget address before his death that his Government will introduce VAT. And his successor, Stephenson King, in his 2011 Budget address, reiterated Sir John’s comments promising to introduce VAT in April 2012.
The Saint Lucia Labour Party (SLP) leader recalled that King had prepared draft legislation and engaged civil society on the merits of VAT.
“Apparently, the wisdom of Sir John Compton in announcing the introduction of VAT in 2007, was conveyed to his successor, Hon Stephenson King, but somehow not to King’s successor as leader of the UWP, Allen Chastanet, even though he was part of the Cabinet that made those decisions,” he remarked.
Dr. Anthony said his government believes that VAT has settled reasonably well, and while it is not perfect, there will be need for adjustments from time to time. However, he opined that the number one priority should remain the creation of new jobs.
“And this will be the continuing focus of a new Labour Government. We believe that more money must be put in the pockets of Saint Lucians by reducing on the number of persons who pay personal income taxes, reducing corporate income tax to encourage even more investment, and ensuring a fair and just property tax regime,” he added.
The Prime Minister believes that Saint Lucia’s revenue base must be protected to pay for hospital care for citizens, pay teachers to educate children, provide more access to university education for our young people, and to protect the elderly, the poor and the vulnerable.