The United Workers Party (UWP) is actively engaged in reviewing the current tax system on the island with the aim of finding a suitable system by which the party could implement if elected to government.
Opposition Leader Dr. Gale Rigobert told St. Lucia News Online (SNO) today, July 31 that the party was very clear on its position when it said Value Added Tax (VAT) will only be implemented on the basis of whether the economy could absorb it.
“The UWP is currently reviewing the tax structure to ascertain which tax arrangement is best for the people and the government. It will generate revenue, but we don’t want to impoverish our people and further contract the economy,” the opposition leader explained.
Dr. Rigobert asserted that the UWP has always said that even if VAT is introduced, it must be done at a rate suitable to the economy and should take into consideration citizens’ spending power.
The UWP official believes that the downside of VAT has near-crippled the economy.
“A 15 per cent VAT rate, we have seen in part, has resulted in a contraction of the economy, increasing prices of goods and services, and what’s particularly worrying are increased food prices further compounded by the government’s decision to lift the subsidies on: sugar flour and rice,” she said.
“The decision taken by the government was unreasonable and unwise. In the last two and a half years what have we seen? Labour has applied 15 per cent VAT, they removed subsidies on key staples, the price of water has gone up, and the price of electricity has gone up. They have increased the goods that are now considered VATable,” she added.
Dr. Rigobert argued that government cannot continue to tax its way out of the current deficit it is faced with. She said this move is simply dipping into the salaries of the same set of people that have been faced with increased prices of essential goods and services.
“People’s disposable income has not only shrunk, it has disappeared…and more places are closing…,” she added.
“This country has been impoverished in the last two and a half years, very contrary to what the Labour government had promised. They promised more jobs…What we have seen… is more for water, more for electricity, more for food.”