Eustace: ‘VAT will bring hardship’

The May 1st introduction of the Value Added Tax (VAT) system will lead to greater hardship for the people of St Vincent and the Grenadines. This is the view of Opposition Leader and President of the New Democratic Party (NDP), Arhnim Eustace.

Speaking at a press conference on Tuesday, Eustace said that the VAT was being implemented without significant tax reform in personal and corporate income tax which will cause this hardship – especially to the poor.{{more}}

Eustace said that he had great concern about the millions of dollars worth of existing stock being held in businesses. He said that these goods will become very expensive because VAT will now be added on goods for which consumption tax has already been paid.

“I am not convinced that the required level of preparation for smooth implementation of the VAT has taken place either at the governmental level or at the level of the businesses,” Eustace said.

Eustace also repeated his call for the list of basic items that are zero rated to be lengthened. He said that the NDP had developed a list with an additional 60 items which they feel should be zero rated but this has been ignored by the government.

Eustace also condemned Government’s move to add a 60 percent excise tax on incandescent light bulbs as part of the policy of encouraging citizens to use the energy saving bulbs.

He said that instead of adding a tax on the incandescent bulbs the Government should have removed the tax and other charges from the energy saving bulbs to make them cheaper.

“The NDP does not believe that that approach should be taken to encourage the use of the energy saving bulbs given the fact that poorer persons cannot afford the energy saving bulbs at this time,” Eustace said.