News
June 15, 2007

PM: Zero-rated items list will grow

Prime Minister Dr Ralph Gonsalves has given the assurance that the list of zero-rated items will be increased over time as his government continually assesses the Value Added Tax (VAT) system.

Dr Gonsalves said that his government is sensitive to the issues that have arisen since the May 1st implementation of VAT here in St Vincent and the Grenadines.{{more}}

“As we proceed I have absolutely no doubt that the list will grow,” said Dr Gonsalves, during his ministerial address in Parliament last Thursday, June 7th.

Dr Gonsalves again accused some sellers of food and beverages of practicing price gouging, which he claims is adding to the tension and complaints about the VAT.

“Some of them increased prices since January,” he said.

He also accused The Opposition, which has been very critical of the way VAT has been implemented, of not speaking out against price gougers.

The Prime Minister suggested that the opposition party is supported by some of the supermarkets that may be involved in such practices.

He said that while propaganda has been spread on the issue, citizens of the country know where to place the blame.

“By and large they have been critical of the price gougers and not the government,” he said.

Dr Gonsalves also announced some amendments to the administration of the VAT. He said that VAT has been removed from the sale of commercial property. Previously, only the sale of agricultural and residential properties were exempted from the VAT.

Transportation of local goods and services on boats and ferries has also been exempted from VAT. This last item The Prime Minister explained, was in special consideration of the citizens of the Grenadine islands.

He said that building costs are already much higher in the Grenadines so he is sensitive to what effect the addition of VAT to the transportation of goods has on the people of the Grenadines.

This move has been applauded by the opposition New Democratic Party, but opposition leader Arnhim Eustace continues to ask for an increase in the list of zero rated goods.

There has also been a temporary zero rating of Yacht charter operations.

Dr Gonsalves explained that this measure will be for a year while discussions continue with operators in the sector to arrive at a consensus that will ensure a reasonable collection of revenue by the government along with the sustainability of the sector. (KJ)