BASSETERRE, St. Kitts, CMC – As St. Kitts and Nevis inches closer to implementing the Value Added Tax (VAT), former Barbados Prime Minister Owen Arthur has described it as the best option for the region in the age of trade liberalization.
“We are living in an age of trade liberalization. What it means specifically, if you take that concept and break it down, is that to be part of a Caribbean Single Market and Economy (CSME) we have had to remove import duties on goods coming from the rest of the Caribbean and also all Caribbean countries that are part of the CSME have also to reduce their top rate of import duties from 45 per cent to 20 per cent to implement what is called the Common External Tariff,” Arthur said.
He explained that “in order to compensate for the loss of that revenue” Barbados introduced the VAT in 1997.
“But subsequent to that the region has become more and more deeply involved in relationships that require the removal of import duties,” the former prime minister said.
“Recently we entered an Economic Partnership Agreement with Europe which is about now to take full effect because it had a three-year grace period. What that EPA involves is removal by the region and economies like St. Kitts/Nevis of import duties of good coming from Europe that historically have carried an import duty.
“The region is also negotiating similar arrangements with Canada and I would imagine that other countries would sooner or later ask the region to put in place new trade arrangements with them; so in the age of trade liberalization, countries that have historically depended on import duties for a large part of their revenue now have to remove those import duties and you have to replace them with something,” he added.
Arthur, who was adamant that he was not trying to get involved in the domestic politics of this country, said that he was “surprised that it has taken you so long because you are subject to the same forces in St. Kitts/Nevis as we are in Barbados that warranted the introduction of the Value Added Tax”.
He said one positive of the VAT is that countries could target the implementation to free exports to make their economies more competitive.
“You can also target it to allow the sectors that you feel are areas of activities that are worthy of exemption from taxes to be exempted from taxes,” he said.
“But more to the point, it brings an assuredness to the collection of government revenues to enable you to have a sound fiscal position. The Value Added Tax allows you to broaden the base of taxes to include things that historically have not been subject to tax.”
The opposition People’s Action Movement (PAM) has urged the Denzil Douglas administration to reconsider introducing the VAT on food saying it would have implications for food security in the country.
The VAT in Dominica is too high. It needs to be restructured in relation to the Dominican economy.
It is crippling the small business, and the common people as well.Things are hard enough already as it is. It should be limited. some commodities(not local) and some services,not all. There are some instances where people end up paying VAT twice,because of the way in which it is structured.The consumers need to be protected.
It’s very difficult for the people.They are barely making ends meet. Those who have a little,they are holding on tightly,the others who are eking out a living out of very limited resources and opportunities,are barely making it..And those who don’t,well man, they live real badly indeed.
Why is it that products that are made or manufactured in Dominica, are much more expensive for the local consumers?.I think this is ridiculous,and the Govt.need to look into that.I should not have to pay more for something that is made or manufactured in Dominica, than something imported.In other words it cost me less to buy Dominican products outside of D/CA.,then in D/CA.
Yes,Government have to collect revenues,but they have to think of more prudent ways of doing so without puting extra burdens on the people whom they represent. In a Democracy,Govt. is of the people,for the people and by the people. Not to suppress the very ones who elected them to the positions in which they are.Too often,Govts. tend to forget and neglect the the people.
But,as the saying goes..power tends to corrupt, and corruption seems to be rampant in most Govts. of today. You need to always listen to the People’s voices. Hear their cries and pleas. Address their needs. Implement ways and programs, to make life better and easier for them. Secure and protect their Rights. Be accountable to them. You have an obligation to facilitate the creation of opportunity for the people,not just your supporters,but all Dominicans.After all the greatest asset of any Country are its people.
Dominica needs Leadership with the interest of the People at heart. Mr.PM.,I met you once,and you seems to be caring,charming and approachable. Also, you left me with the impression that you make yourself available to the people.Those are good qualities for Leadership. I believe personally, Sir, that you are a decent man, who cares about Dominica and its people.
But Govts. come and Govts. go…People are tired of the same exact things and methods.We need a different outlook on the part of Government. It is not too late Sir,you can turn it around.
We need innovative mechanisms to make the Country better.We need economic development.
Manufacturing is the difference between 1st world and 3rd world. We need to get more efficient.We need to industrialize. The wealthiest Countries in the world are all industrialized Countries.
I know, it is not that easy Sir,but should i say,that i believe you have vision? You Sir,(the Government),have been invested with a lot of power.And it is with that power, Sir,that you can use to help Dominica, and its people. Let us not squander the opportunities of Independence.
And the people themselves need to start taking a different view of themselves and their worth.
Thank you very much.
All the best to you…..and…Peace profound!!