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VAT—Vacuous Afterthought

Saturday, January 16, 2016

Much of this week was consumed with chatter about the possible impacts of the revised VAT regime on the vulnerable in society. Even as the government works through the, yes, I am going to say it...bread and butter issues of the zero-rated list, the gnashing of teeth calls for a dose of perspective.

VAT was introduced by the NAR in 1990. The People’s Partnership, in what was an illusory attempt at food price control, removed VAT from thousands of food items. 

Almost three years later, the PNM is moving the majority of these food items back onto the VAT list. 

Given that we have been paying VAT for 25 years, the “chicken little” reaction to the government’s fiscal manoeuvring is little more than a storm in a now-empty tea cup.

Of greater concern is the paucity of incisiveness as a strategy and the appalling debate in Parliament which reflects a terrifying lack of thought about the challenges at hand. 

This is bigger than VAT folks! We are faced with a crisis precipitated by plummeting oil revenues and the best we can summon is a review of a taxation regime.

Also troubling is the addition of books and computers to the VAT list. 

This is counter-intuitive in a nation whose future depends on an educated and tech-savvy population. 

Small businesses use computers to streamline and expand their operations on a foundation of growing efficiencies. Learning is a lifelong process and books of every variety are a big part of that. 

While the Ministry of Finance website appears to make some distinction (albeit vague) between literary works and textbooks, do we really want to impose taxes on books in a country where people read far less than they should and, consequently, can neither write nor express themselves properly? 

How are we to be competitive if the Trini is the one in the business meeting saying, “De bildin dere...ahm…ahm how much rent yuh have to pay?” 

Again, it’s about the lack of thought that constitutes governance here. Few can argue that the government needs to raise revenues through taxation to meet the operating costs of a spoon-fed country. 

It just seems creativity and intelligence are the first casualties of this recession. 

Recently, NGO Arrive Alive congratulated the Police Service for having issued over 50,000 traffic tickets in 2015 amounting to a staggering $45 million. Imagine what the state could do if that money was actually collected! 

Based on our affinity with law-breaking, the government can generate annual revenues of close to $500 million for a minimal investment in proper no parking signs and a well-resourced traffic court system to enforce the collection of fines. 

It just seems better to get money from lawbreakers than wring it from the hands of householders trying to make ends meet. 

Traffic wardens, who bless their hearts, do little more than choreograph traffic congestion can be retrained to become parking officers. 

As the concept expands and money pours into the state’s coffers, the Government can finally install parking meters in our cities and towns. 

Parking on our main streets is already an accepted practice, why not make people pay for the privilege? 

Sounds like common sense, no? If it’s being considered why haven’t we heard about it? Furthermore, why isn’t it being done?

By words and by deeds, it appears we are governed by a class of leadership that has neither the gravitas nor competence to pull this country from the chasm of oil dependency and economic stagnation. This is true of both the government and the opposition.

Instead of a rally of ideas and healthy criticism about the current economic crisis, here’s what we get: Dr Rowley wields the spectre of a $400,000 speakeasy left at the Prime Minister’s residence by the People’s Partnership. 

The Opposition chides government for ostensibly breaking its election promise of “reducing” VAT. 

Attorney General, Faris Al-Rawi announces the Government is saving $150,000 a month by cutting electricity to the “in limbo” Couva Children’s Hospital. 

Had he also mentioned that the state has instructed all government offices to turn off the lights at the end the day then his remarks would not have come across as petty political revenge so typical of leadership in this country. 

Couva North MP, Ramona Ramdial, warns of a surge in crime because of the new VAT measures while COP political leader, Prakash Ramadhar, condemns the tax...on salt. 

The Opposition appears ill-equipped to hold the Government to a higher standard through intelligent discourse. 

Additionally, revelations of corruption allegations against the previous administration (which must be investigated and prosecuted where applicable) can be handled by the Communications Minister at the post cabinet news briefing. 

Instead, these issues dominate discussion in the nation’s Parliament, leaving reasonable people to question whether there is really any sound strategy at work here to address foreign exchange shortfalls and recessionary fallout. 

That tough decisions have to be made in a recession is a given. Also required though are inventive solutions and creative thought. 

So far, neither the Government nor the opposition are showing that they are equal to the task.


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