PM hobbles to VAT office
May 18, 2007

PM hobbles to VAT office

Prime Minister Dr. Ralph Gonsalves has declared war against business houses that are caught exploiting the Value Added Tax (VAT) system but Chamber of Commerce’s President Martin Bollers has described some of the accusations coming the way of his members as unfair.{{more}}

In what was his first official activity since his return to the state from Cuba last Saturday, Dr. Gonsalves, walking with the aid of crutches, toured the offices of the VAT unit, met with the staff and listened to the difficulties that they were experiencing since the May 1st implementation of the VAT.

“The single most important issue facing St Vincent and the Grenadines today is the efficacious and efficient implementation of VAT,” Dr. Gonsalves told reporters yesterday.

Dr. Gonsalves said that VAT is important as the country builds a modern, post colonial economy and must be implemented properly.

He said that the issue of price gouging is not just an economic issue but a moral one. He compared it to meeting someone in the street and robbing them.

As he was informed by VAT Unit staffers of the complaints of price gouging and VAT being charged on exempted goods, Dr. Gonsalves said that an example had to be made of one or two businesses.

However Bollers said that while there were some errors in pricing by some businesses, there was no evidence of any deliberate attempt to fleece consumers by the Chamber’s members.

He further noted that consumers may not understand that duty and consumption tax had already been paid on existing stocks and now VAT has been added to the retail prices, hence the increase in prices.

“What we are doing is speaking to businesses, finding out what is going on and making sure that they understand the process fully,” Bollers said in a recent television interview.

He also cautioned against the use of any strong-arm tactics against his members, stating that it takes time to adjust to new processes.

Meanwhile, at a press conference last Friday, April 11, Minister of Trade Sir Louis Straker said that a close eye would be kept on illegal escalation of prices due to the implementation of VAT and the increase in gasoline prices at the pumps.

The price of gasoline at the pump increased from $9.75 to $11.50 per gallon as of last Monday May 14, carrying the price to the pre-January 1st, 2007 rate.

The Prime Minister also toured Food City, the government run supermarket on Monday, which as a matter of policy has decided to keep all their prices at the pre-VAT level.

Dr Gonsalves said that Food City would absorb the VAT on the old stocks. He said that with the new stock, prices by and large should be adjusted downward because the VAT would be less than the pre-existing consumption taxes paid on imports.

The Prime Minister said that he expects competition to keep prices down and not price control, and that Food City will be used as a buffer against supermarkets that may try to fleece the consumers.

Dr. Gonsalves used the occasion of the tour to reiterate his belief that the case for VAT is strong. He said that while both the Government and Opposition are on record as being for the implementation of VAT, it had fallen on his Unity Labour Party (ULP) administration to bring the legislation.

He also expressed his willingness to review the list of zero rated and exempted goods; a call that has repeatedly been made by the opposition. (KJ)