Fri 29th Jun 2018
Corporation tax in SVG is way too high and it is killing the economy. The high corporation tax is making it very hard for SVG businesses to grow and prosper. If businesses can’t grow then the economy cannot grow and this means that it’s very difficult for the private sector to create new jobs.
Small businesses are the beating heart of vibrant economies, but small businesses in SVG are being bludgeoned by high corporation tax and finding it very hard to survive, let alone grow. Also, the high corporation tax in SVG, puts SVG’s businesses at a disadvantage with other businesses in the same sector in other countries with lower corporation tax.
SVG businesses cannot really compete in the global market under the ULP regime’s brutal policy of high corporation tax.
The Leader of SVG Green Party, Warrant Officer Ivan O’Neal BSc (hons), MSc, MBA, who has a BSc (hons) from Oxford Brookes University, England in Accounting and Finance and Economics, strongly believes that SVG urgently needs a substantial cut in corporation tax to help SVG businesses to grow and be competitive in the global market.
The table shows the significant difference in the management of a country’s economy between Singapore and SVG, and the significant difference in results.
Singapore operates a ‘low tax’ regime – its corporation tax is 15.5% lower than that in SVG. Consequently, it has much higher economic growth than SVG and very low unemployment. Since 2001, SVG’s unqualified Ministers of Finance have operated a very ‘high tax’ regime and this is so foolish in this day and age.
Warrant Officer Ivan O’Neal recommends that the economic policies in SVG should be brought more in line with the economic policies of Singapore. This is essential for SVG to create significant economic growth, create thousands of new jobs and reduce unemployment.
SVG must cut corporation tax by 12.5% and abolish the 16% VAT. This will help SVG’s businesses to grow and make them competitive in the global market. Financially, this can be offset by a windfall tax of EC$1.5 billion on Taiwan and the super-rich of Mustique and Canouan.
One of Canada’s most important positive policy reforms has been on corporate taxes. Federal and provincial governments realised the economically damaging effect of high corporate taxes and lowered rates to make the business tax regime more competitive. As a result, from 2000 to 2015, Canada’s combined federal-provincial corporate income tax rate fell dramatically from 42.4% to 26.3%.
High taxes reduce the payoff to entrepreneurship, investment and work effort. If taxation is too heavy, these disincentives will weaken a nation’s economy. This is what’s happening in SVG right now.
According to Warrant Officer Ivan O’Neal, we cannot hold on to the present ULP regime high tax regime as it is counterproductive to the long-term economic development of SVG.
It is high taxes in SVG that is causing the high levels of poverty, hunger, crime and unemployment in SVG that is breaking up our society.