June 23, 2006
IMF lauds plans to introduce value Added Tax

The International Monetary Fund (IMF) has acknowledged government’s plans to introduce a value added tax (VAT) system by next year as a step in the right direction.

The VAT system is one measure the government intends to introduce to improve tax policy and administration in order to broaden this country’s tax base.{{more}}

While the IMF applauded the new tax measures, they expressed great concern about the rise of public debt. The public debt, which has been an increasing burden to government, has swelled to $985.9 million, a figure which places debt financing at 22 per cent of current revenue.

With this country’s public debt increasing from less than 50 percent of GDP in 1997 to some 85.2 percent at the end of the last financial quarter, the IMF has called on government to pay more attention to the weakening fiscal situation.

This country was however applauded for its ongoing discussions on public policy, through the formation of National Economic and Social Development Council (NESDEC), the boosting of disaster mitigation and preparedness through the drafting of the national disaster plan and the poverty reduction strategy paper.

IMF officials however cautioned, that more attention needs to be taken to “control the high wage bill and public spending.” This year’s budget tabled a 6.4 per cent increase on wages and salaries of 2005.