PRIME MINISTER: VAT on utilities can help, but economy is too fragile

PRIME MINISTER: VAT on utilities can help, but economy is too fragile
PM Anthony.
PM Anthony.

PRESS RELEASE – Prime Minister and Minister for Finance Dr. Kenny D. Anthony said the option to cure the deficit by raising more revenue by imposing VAT on electricity and water would place undue burden on the poor and vulnerable at this time.

In an Interview with HTS News Force on Thursday, May 8, 2014, the prime minister said the government can raise additional revenue by implementing VAT on utilities. However, Dr. Anthony insists the economic conditions do not encourage such a move.

“There are a lot people who argue that the problem could be resolved by introducing VAT on the consumption of water and electricity. Let’s face it there are countries in the region where citizens pay VAT on water and electricity but there are some realities we have to contend with. If the government had to introduce VAT on utilities, we would raise about $31.5 million annually, easily, on electricity alone. If you were to add VAT on water then it would be much higher. Clearly, if you can collect $36 million in one year, then you would go a long way to resolving your problem,” Anthony said.

Notwithstanding, Prime Minister Anthony stressed that in its manifesto, the SLP indicated that it will consider VAT on utilities only when proper regulatory mechanisms are in place. There is no proper regulatory mechanism in place at this time.

Further, Dr. Anthony said the impact of such a move on the poor and vulnerable will be very significant. While the commercial sector is a heavy consumer of electricity, if VAT is imposed on electricity, they will be entitled to claim the input VAT thereby lessening the impact. This is not the same for the domestic consumers.

“It is an option that some persons have put on the table. They have said, “Instead of reducing salaries of public officers to deal with the problem of excessive expenditure, why don’t you introduce VAT on electricity and water to increase revenue?” My response is simple. I think this economy is too fragile and as I have said before, I really do believe we need to make a strong effort to protect the poor and vulnerable as much as possible. I would like to think that it will only be in the very, very, last resort that we would turn to such an option.

Such a move would dampen demand for goods and services and reduce even further, disposable income. I do not think right now this is the way to go. We have to make other sacrifices to deal with this problem,” he explained.

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51 COMMENTS

  1. I am sure all of them were seating in VIP this past Sunday enjoy Jazz at the expense of a “struggling country”.

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  2. I would love for the UWP to win the Next General Elections, so that we would see truck loads of cash, our national debt mysteriously vanish in thin air-in one day, VAT removed, best health care in the region, everyone well fed, the public service gets a 45% pay raise, crime is reduced to a bare minimum and everything is wayyyyyyyyy better.

    Let's see if this can work. 🙂

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  3. Why dont the prime minister cut his salery by half and the salaries of those ill ministers he have in the hous. Mr pm chairty begins at hom. You doc are running Helen to hell and back. you think you have all the right answers to all the problems that you have created with all your lies. Put our island where we once was without crimes and joblessness you dam moran

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  4. All that talk about Kenny & vat. Remember if UWP had regain power the vat have been implented from April. St lucians behave youll selves. When youll come to Americia youll paying vat nothing for that. St lucians r to happyR

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  5. That VAT on utilities is a setup. Trying to turn the ordinary citizens against public servants who more than likely will object to the 5% cut.Politicians are sooo transparent. So the 14.5% that King gave to public servants was tipping point for all this economic hardship but you were the one saying King should bite the bullet and give the workers their 14.5%. I swear Im sick of politicians in St. Lucia

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    • When civil servants rejects the cut he will apply the VAT on utilities, which he always wanted to do and will blame it on the civil servants.Still have VAT on medicine and no VAT on medicines for dogs and other animals. I am guessing that the bouzwars that are the one buying medicines for their dogs and the malaways dying of diabetes because they cannot buy medicines.

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  6. Our ELECTRICITY bills are already too high as they are now to put a 15% Tax on them. Where does it end? The 15% comes from our salary.

    Sorry Mr. Prime Minister but if you and your Cabinet put VAT on LUCELEC bills this will be the end of you all Administration.

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  7. Why don't you start with restructuring your top heavy ministries etc.. a consultant for this and that...mayors? SLU has mayors?...what the heck? So many assistant this and that...overpaidddddddddddddddddddddddddd for no reason. Why is it that the masses have to pay for the poor divisions made? Invest in your human capital for crying out loud! Think long term...

    PS what's the point of mentioning something... then saying it's a bad idea given our economy...then say only if certain measures are in place it may be implemented/considered...

    S E R I O U S L Y???

    Yall know it's gonna happen..... the quick fix to poor decision-making... while the rich folks feel nothing and the regular suffer...

    SIGH!

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  8. You'll lucians are idiots. Take what you'll get and shut up. You morons voted him in. Any person who says he will encourage investors to turn their back on HIS country just to give him political mileage should be tried for treason.

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  9. Its a bloody shame that the PM is talking about VAT on utilities when majority are struggling to pay such. Did anyone notice how precise and exact he was with the figures? "$31.5 million on electricity alone...". Yep, he considered it and will likely do it before his term ends...unless Lucians no matter UWP, SLP, LPM, PLP, tout P take to the streets to oust him. A failure yesterday remains a failure tomorrow until he sees, accepts and corrects his problem. Kenny problem is that he thinks he is the only smart person in SLU, the Caribbean and the world. Chou Lucians pwee e sam!

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  10. and please in all haste were are to move away from enlgand , please , think before we tell them we will no longer need the privy council, i say wait until they force to the ccj ,

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  11. wha Kenny, i dont know what tell you, but i guess you regretting whilst in opposition you saying that you will deter investors from investing in St. Lucia, smfh.... Honestly UWP & SLP different parties but both full of DOODOO............

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  12. Kenny, take you new mandate (of failure)to the people in a General Election and see what happens. You could not do what you promised, the Blueprint for Growth has been abandoned, including the vision articulated therein. As such, you own it to the people of St Lucia to admit you failure and let them decide, through an early poll, whether or not you're the man for the job. For once in your life, do something honourable.

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  13. Which one do you all love more? St. Lucia, or Ro-ro! As Dame Pearlette has said, we need to decide whether to join hands together to prevent the ship of state from going down, or to continue with this internecine strife, whilst we all go to the bottom of the ocean !!

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    • Jack..., the PM is the one who gave the robot Queen substitute, you call the GG to read what she said. It did not come from her own brains as Pip wants us to believe. Everbody is a lying machine these days. The GG is a creature of the PM. If she refuses to read what the PM writes, he simply gets another robot to read the other parts of his crinkled ideas by the next budget, if he lasts this long.

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