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Prime Minister Ralph Gonsalves. (File photo by Lance Neverson/Facebook)
Prime Minister Ralph Gonsalves. (File photo by Lance Neverson/Facebook)

Prime Minister Ralph Gonsalves has dismissed as “very reckless and irresponsible” the proposal by the main opposition New Democratic Party (NDP) to reduce VAT.

The NDP has said that if elected to office in the Nov. 5 poll, it would reduce VAT from 16 to 13% and would further remove VAT from a number of food items and basic commodities.

Gonsalves, speaking on WE FM last week said:

But where they’re also being very reckless and irresponsible, they’re telling people that they’re going to cut VAT from 15%, they going cut off five percentage points, and bring it down to 10 — that’s what they’re saying and they’re going to move away the additional 1 percentage point which we have for the disaster fund, as part of the contingency fund.”

The prime minister, whose Unity Labour Party is seeking a fifth consecutive, five-year term in office, said that reducing VAT does not mean that supermarkets will lower the price of commodities.

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Gonsalves said that in 2020, the government is estimated to collect $585.7 million in tax revenue.

He said that when incumbent East Kingstown MP, Arnhim Eustace was prime minister, he had announced the NDP’s intention to introduce VAT, a policy that the ULP implemented.

“And we supported it. The reason why we support moving to the VAT is because the economy was increasingly becoming services and 80% is now services — at a higher level than before.

“… so you’re moving away the consumption tax and you put the VAT, roughly is the same percentage, but what you also include now in the VAT is services. … services like medicines and so on are exempt.”

Gonsalves raised questions about how the opposition would make up for the short fall.

“… because this thing about citizenship by investment, selling passport and selling citizenship, is so unstable and so wrong in principle that only a reckless government would so proceed,” Gonsalves said.

“So they will have to increase taxes elsewhere. It might be a foot tax, a mouth tax, a hand tax, an ear tax, and eye tax, they going shift it from one place to the next, where it is less efficient.”

He said that the government already has a lot of tax exemption and a lot of zero-rated items.

“For instance, the first 150 units which you burn for electricity does have VAT on it… The point is this, we are already taking into account the poor because remember, we just zero rate and exempt an additional number because of COVID.”

He said his government had done this to give some ease to the people, even as the national coffers suffered loss of revenue.

13 replies on “PM says reducing VAT is ‘very reckless’”

  1. He prefers to give love boxes rather than take the pressure off the poor. You see how much he loves the people? Wicked, power hungry man!

  2. Hit da road Ralph and don’t you come back no more no more , hit da road Ralph and don’t you come back no more, moreoooooo!

    Hit de road Ralph, hit de road dread, jus beat it dread. Yea beat it. We lang fo see yo go. We lang fo see yo go. We hope fo see yo go! We hope fo see yo go an never come back we jus lang fo se yo go, carze wah, as Mitchel say, people fed-up ah yo Ralph.

    Eh man ah tell de Comrade fo beat it dread! Time fe im fe hit de road carze wah, dem carr teck no more ah im an im family dem! Carze wah, time fe Vincyman fo be free again yo nah see. We lang fe see im go an sure never fo see im come back, we jus lang fe see im go!

    So now is time fe say Goodbye-ee to Ralph Gonsalves, dis verbosely bloated windbag dat gat we by de throat an neck back an won’t lego we! But wah, is time fe we fo say goodbye to dis big tyrant!

    Time fe pack yo tings dem dread, an beat it! Vincyman ah say to yo Ralph jus beat it dread, jus beat it, carze wah, yo time done! Man warn’t be free again!

    So hit dah road Ralph, hit dah road!

  3. In other words Cumrod, the NDP should keep the pressure on the poor and vulnerable vincys,right? Taxing poor people to death isn’t how you develop a nation Cumrod. Having poor people on poor relief isn’t nation building.You ever looked at the desperation on the faces of Vincentians Cumrod who often times have to sacrifice to make ends meet?You have to cut and contrive in Vincy to survive. You either buy the medicine or the food but you can’t buy both .That’s everyday life for the majority of Vincentians. Have you ever made any sacrifices in your life Cumrod? You haven’t so that’s why you could recklessly tax the poor people to hell and back with a straight face.

  4. It would be easy to write a comment on this article that would be much longer than the article itself. I think Ralph Gonsalves is a gifted man in many respects of intelligence but this article shows that is not at all true when it comes to economics. That is why the country is in the state it is in. Who knows what the cohesive macro economic plan of the NDP will turn out to be after the NEEDED changes are made but it is sadly clear that anyone with any sense should not listen to the ULP in the field of economics. If our PM tells us the NDP will create new taxes, HOW MANY NEW TAXES AND RAISING OF THE OLD TAXES IS HE RESPONSIBLE FOR? Truth is that he does not know how to create an environment where the private sector can create jobs so he has constantly raised taxes to make up the difference!

    The way to create an environment of prosperity is to lower taxes (and certain regulations) that help business to become prosperous so they can expand and hire people. He has done the opposite! the former NDP was not even good; this new NDP sounds much better.
    End the stupidity of the UNFAIR Concession System. Instead lower duties on machines and other items that promote production and creativity of business, and make it so farmers and would-be entrepreneurs do not have to BEG GOVERNMENT and spend MONTHS (sometimes a year) going through MOUNTAINS of paperwork going to lazy do-nothing BIASED government officials in several departments only to be told…SORRY! or…here is a slight reduction of your VERY HIGH DUTIES.
    I am sorry. I come from the area where Bill Gates lived, Jeff Bezos and many such others. Companies such as Starbucks, Safeway, Nintendo, Lockheed-Martin, Boeing, etc…THINGS ARE DONE DIFFERENTLY THERE! As I said, I could write so many suggestions for our SVG government but maybe the goal here is for government to gather all the wealth from the people before they even have a chance to earn it for themselves.

    The entire economic system needs to be overhauled into a “lean mean machine”. At present it is a turd.

  5. Mr. Prime Minister, VAT is an overwhelming burden on the ordinary tax payer. It is necessary but too high. The single biggest issue in SVG economy is that your spending is too exorbitant. Unfortunately, SVG runs on a budget deficit every year. Consequently, residents face this burden through high taxation.

    Your spending cannot exceed your earnings or you will be indebted for life. It is simple economics. If you continue on this path, St. Vincent and the Grenadines would end up like LIAT or perhaps Greece, a colossal failure. The Country needs to create jobs and boost economic output. This would enable citizens to receive a higher level of disposable income hence lead to an increase in Government receipt through taxes.

    Both Political Parties must come to a consensus or a law must be enacted to ensure that the country’s budget has a surplus each year. This would enable SVG to realize a savings for the rainy season like now. If the country is taking in one billion dollars per annum in revenue and other receipts, the minimum savings should be One hundred million dollars. This equates to 10% per year, which should be the rule of thumb. Reduced capital expenditure and scaled development would help achieve this.

  6. The NDP lf successful at the pole this Election they can carry out their plans to take off Vat from some basic items. This not first time it was done before in austerity ways and prudence spending by James Micheal NDP.
    Cut out the pork barrel spending.
    You stop over estimate projects and contracts to families and friends.
    You cut out all those security personnel and armored vehicles.
    You remove all those talk heads on Radio who are political associated with your party and being paid from purse of the tac payers.

    You cut out some of those picture (photo) trips abroad and travel to the ones that economically benefiting SVG.

    You will call on your people to eat more local and cut down on foreign imports.

    Give more incentives to local businesses to complete so they to can reduce high mark up on items as Fish, meat, etcs. Including fishermen and farmers.
    Education supplies and uniforms targeted.

    Dumbbells, more money will circulate in Economy by the consumers and the taxes will come back and there other a area to impose it on company that fly our flags in foreign lands.
    We ate not so gullible and dump Ralphie you lost this on.
    Reduce Tax never kill a Country Economy bad Spending, and High Tax do.

    My to cents

  7. If it is reckless to lower Vat then if re-elected we can look forward to it being raised that’s the subliminal message

    1. Great observation! So simple but yet it did not occur to me until your comment. Maybe raising VAT should be listed as one of his election promises. I’m getting sick of all the taxation about now.

  8. Mr Prime Minister when you collected all that money where does it go? During the NDP 17 yrs in office there was no vat, there were no pressure on the poor like today. You has turned a blind eyes to most of the constituencies. No road repair in rural areas. You have been pocketing the Vincentian people money in an unjust way. You do not deserve the salary you received over the yrs. Let someone with knowledge of running a country show you how to do it. Go home. Let Vincentians abroad be happy to come home again.

  9. Do the right thing says:

    What a bunch of rubbish this man is speaking to the nation. And its ashamed to see all our beautiful women parading alongside him every campaign after everything while you have no jobs only broken promises and you have to beg for bread to feed your kids

  10. You Vincentians who are making comments on Ralph should take a look on the progress of how saint Vincent is today and how it was yesterday in the time of Michelle. Are you really looking and comparing. I used to be ashamed of taking anyone there when I want to visit, the country was a disaster zone. Last year I visited my island and was so proud of the progress that have been done by Ralph begging every country on the map for help yo give us an international airport. I was very proud stepping off the plane seeing our beautiful airport. God bless that big belly man. Do you all think ndp is going to give you all a.better life. Yes degrade Ralph for his progress. Just remember that mo matter what happen Friday is going to do the same as Mitchell, rob the country of all the asset and leave your asses poor again. Those guys you all have to be head of government with ndp is a bunch of ugly people. Friday is the only sensible one in the group. Ralph is stating facts about keeping the foreigners out of saint Vincent who wants to be involved with ndp. God bless you all November 5th. Praise be the glory.

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