Articles

Thu 29th Mar 2018

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VAT is killing our economy and country

There is plenty of evidence to show that the 16% VAT is a very big mistake for our country. VAT is counter-productive in SVG. VAT is choking the economy, has pushed up unemployment even higher, forced many businesses to close down and now there’s very little money circulating in SVG.

VAT is killing our economy and country. It is causing economic stagnation.

Many people on low incomes have told the Leader of SVG Green Party, Mr Ivan O’Neal, that they are finding it very hard to make ends meet with their shopping. They find it hard to feed their family adequately, pay the light bills and pay school fees. A large number of Vincentians have said that the 16% VAT should be abolished.

Since 2001, the ULP regime’s financial and economic performance has been appalling. Their lack of vision and planning is causing a lot of hardship throughout the country. Pushing VAT and high taxes as the solution for correcting bad economic planning could bring the 1935 situation of spontaneous public unrest in SVG.

Many people have said that there is no improvement in the SVG economy with the high level of VAT. This is true. The effect of VAT in a poor country, such as SVG, actually reduces the amount of economic activity. This can be seen all around SVG.

VAT is a ‘blunt instrument’ in economics that lacks precision. The ULP regime has wielded VAT without full consideration of the impact that it will have on the economy, businesses and the population, particularly the weakest elements of society.

The economy of SVG needs to be handled with finesse and that means targeted policies and accuracy. Smashing a peanut with a sledgehammer, i.e. using VAT, is not the answer. It is clear that the ULP regime lacks the knowledge and wisdom needed to build prosperity in our country.

Warrant Officer Ivan O’Neal is making a very strong call on the ULP regime to urgently abolish the 16% VAT in order to stimulate economic growth and jobs in SVG. SVG businesses need a more conducive economic environment for them to flourish and grow. At the moment, the ULP regime’s economic policies are bad for business. The economy is getting worse by the day with the 16% VAT.

Warrant Officer Ivan O’Neal, who has an MSc degree in Macro-Economic Policy and Planning in Developing Countries from Bradford University, England, says that a Green Government would abolish VAT as it is highly regressive. It punishes poorer people more and stagnates businesses.

A Green government would also invest heavily in high-quality education from pre-school to university and set up SVG’s own billion-dollar tuna fishing and canning industry. This would bring a huge amount of revenue in to the SVG Treasury, create thousands of new jobs and fiscal stability.

We must abolish VAT. In SVG, we need to tax those who need to be taxed: the super-rich, white migrants in Mustique and Canouan. These parasites are making millions of dollars in a tax-free environment. It is not only scandalous, but irresponsible for the ULP regime to let this happen.

Taxing the super-rich will alleviate the need for poor families to pay so much tax.

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