UWP releases statement on VAT imposition

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UWP releases statement on VAT imposition
UWP leader and Opposition Leader Stephenson King
UWP leader Stephenson King

WELCOME TO KENNY’S LAND OF VAT

Saint Lucians who are already reeling under a season of severe economic hardships now have to contend with the imposition of Value Added Tax by a stubborn and insensitive Prime Minister who refuses to heed the call of Saint Lucians to forego the harsh realities of the new taxation measure at this time.

Despite numerous calls from sections of the Private Sector, Hoteliers, Financial Consultants and the general population for the Prime Minister to withhold the imposition of VAT at a time of economic downturn, Prime Minister Kenny Anthony has insisted that he would have things his way.

It is no secret that many of the economic sectors and St Lucians generally do not have economic capacity and are not prepared to deal with the imposition of VAT at this time. The implementation of the new taxation measure, which was announced by the Prime Minister during his budget presentation in April of this year, has been railroaded despite strong and justified calls for a cautious and more meticulous approach.

By his insistence to implement VAT against a tide of growing discontent, the Prime Minister has displayed a highhanded attitude which is void of empathy and certainly reflects a level of disconnect with the reality of “bitter days” which St Lucians have had to contend with since the elections of November, 2011.

It is clear based on the unresolved concerns, the ensuing public debate and the practical experiences since the implementation of VAT that the entire Government machinery was inadequately prepared for the introduction of VAT. This bearing in mind that the VAT legislation was only passed by Parliament a mere 2 ½ months before its implementation.

The fact that the Government has had to enact amendments even before the implementation of VAT and the public expressions of concern of by vital economic sectors days before the October 1st, 2012 commencement date, bears testimony to our unpreparedness as a nation to deal with this new taxation measure especially given its profound and far reaching implications for all.

In the haste to implement VAT, a far reaching and landmark measure the Government did not allow for the observation of a period of “testing” and “trial”. As a result we are certain to experience serious glitches and shortcomings which could only serve to undermine the integrity of the new measure as well as to instigate further confusion and decrease the confidence of Saint Lucians in the VAT system.

The United Workers Party has always understood the inevitability of VAT but is of the view that the current economic environment is not conducive for the implementation of a measure that will only unleash further hardship and lead to the marginalisation of many including the poor and indigent. This outlook was reflected in then Prime Minister Stephenson King’s pronouncement during the 2011 to 2012 budget presentation.

During his budget presentation Mr. King stated the following: “I wish to reaffirm the commitment of this Government to its implementation by April 2012 mindful of the socio-economic responsibilities of Government.” In that same presentation on the subject of VAT, the then Prime Minister stated: “The Government has taken every care, by instituting appropriate safeguards, to ensure that the VAT will not unduly affect the poor”. The UWP has recommended to Prime Minister Kenny Anthony therefore that he should have granted Saint Lucians a reprieve and the gift of a “VAT Free Christmas.”

The stubbornness and insensitivity of Dr. Kenny Anthony has nonetheless been expressed in full character, to the predictable peril of many Saint Lucians. The Prime Minister in his isolated mindset made the determination during his budgetary planning process to formulate the financing of his 2012-2013 Budget on the premise of revenue generated from VAT. This therefore explains his “headstrong” determination and haste to introduce VAT on an already economically stressed population.

The Prime Minister in his haste has taken the decision to introduce VAT during a period of rapidly increasing food prices, removal of subsidies on kerosene (Malewe Fuel), and a persistent recession which has resulted in a slowdown of economic activity.

St Lucians have only in the past few days learnt that VAT will now be applied to some services provided by LUCELEC and WASCO. For example we have learnt that VAT would be imposed on clients seeking reconnection of services. It stands to reason therefore that it is those who are struggling to meet bill payments who are most likely to be disconnected.   Additionally we have found out that VAT also applies on medication with services being exempt. However it is well understood that medical supplies is the more regular requirement and is indeed a costlier item.

Only last week Trinidadian Prime Minister Kamla Persad-Bissessar announced that effective November 15th, 2012, the 15 per cent Valued Added Tax (VAT) on food items will be removed. This, from a country with a strong economy, rich in natural resources and a vibrant manufacturing base.  Dr. Kenny Anthony would do well to take a page from the lessons learnt by the Government of Trinidad & Tobago.

We reiterate our position that the imposition of VAT at this time is unconscionable and is void of empathy on the part of the Government given the current hardships being experienced by Saint Lucians. In spite of his determination to implement VAT a prudent Prime Minister Anthony would have done well to give due consideration to applying an incremental rate system which would allow people to better cope with the added burden brought about by the new taxation measure.

The United Workers Party will monitor closely the experiences stemming from the implementation of VAT. We will also closely monitor the performance of the current Administration in the management and use of the revenue generated from the sweat and toil of Saint Lucians through the imposition of VAT.

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