Fri 18th May 2018
Leader of SVG Green Party, Warrant Officer Ivan O’Neal BSc (hons), MSc, MBA, is making a very strong call on the unqualified SVG Minister of Finance, Gonsalves, to resign for his short-sighted VAT on electricity consumed over the 150 units threshold. This law was gazetted on Tuesday 24th April 2018.
When one incorporates this new VAT on electricity with the 1973 Fuel Surcharge Act on electricity, it becomes quite evident that this foolish use of VAT is financially flawed and highly illegal.
The new VAT on electricity will knock the 1973 fuel surcharge formula out of balance and improperly cause a rise in the rate of fuel surcharge. The end result is that VINLEC customers will pay an artificially-inflated higher rate of fuel surcharge and VAT. This is highly illegal.
One has to wonder whether the unqualified SVG Minister of Finance, Gonsalves, did a simulation test with the new VAT on electricity in relation to the 1973 Fuel Surcharge Act 1973. If he did, then he would realise the impact of VAT on the equation used to work out the rate of the fuel surcharge.
Warrant Officer Ivan O’Neal is calling on the unqualified SVG Minister of Finance, Gonsalves to abolish this new VAT on electricity and resign as the SVG Minister of Finance.
Lowering the threshold from 200 units to 150 units for charging VAT is a cruel thing to do and is socially regressive, in that, the new VAT on electricity will hurt a large amount of people on lower incomes. An additional 13 percent of VINLEC consumers will be subjected to the 16% VAT on their bill.
VINLEC customers will take a double financial hit: they will suffer an increase of 16% VAT for usage of 151 kWh and above and the fuel surcharge will increase too.
Warrant Officer Ivan O’Neal, who has a BSc (hons) in Accounting and Finance and Economics from Oxford Brookes University, England, believes that imposing a fuel surcharge on customers is an outdated and unfair system, and, imposing VAT, as well as a fuel surcharge, is an exploitation of VINLEC customers.
According to Warrant Officer Ivan O’Neal our country is in very deep economic and financial trouble and it is a time for SVG policy makers to cut taxes on people with a low income to stimulate financial and economic growth.
Electricity prices in SVG are very expensive, too expensive for many poorer households. SVG needs to produce more electricity from renewable energy sources in order to reduce the price of electricity and make it affordable to poor households.
A Green government would abolish the fuel surcharge and replace oil with renewable energy, making electricity virtually free. With electricity produced by solar, wind, hydro and geothermal processes, electricity will be cheap. We will ensure that every household has access to mains electricity.
We would also abolish the VINLEC Act, which gives VINLEC the monopoly to produce electricity, so that Vincentians can set up electricity-producing companies.
A Green government would cut the price of electricity by 50%. The first 200 KWh used each month would be free.
Unqualified SVG Minister of Finance, Gonsalves, should resign for his short-sighted VAT on electricity consumed over the 150 units threshold.