Focus on removing VAT on electricity, not on ‘foreign operatives’

Opposition Leader Godwin Friday says Prime Minister Ralph Gonsalves should focus on reducing the high cost of grocery items and removing VAT on household electricity use, rather than so-called foreign operatives allegedly operating in the country.

“So, I am saying take the VAT off until the new year at least, and give consumers a little break. VINLEC will still get its money because it gets its share. The VAT goes to government,” the opposition leader said on his party’s radio programme on Monday.

“Why should government profit on the hardship that people are feeling now? Give them a break. That is one of the things you can do to help with the crushing cost of living crisis that we have in this country instead of talking distractions about foreign operatives in the country and an institute of propaganda and so forth that they’re going to create,” he said on New Times on NICE Radio. 

Friday said the talk about foreign operatives in the country as well as the institute of politics and governance launched last week by the ruling Unity Labour Party are just distractions.

“Deal with the real problems, the pressing problems of the people. When are they going to put forward a plan to deal with the National Insurance Service crisis that gets worse every day?” the opposition leader said.

“People are terrified as to what will happen to their pension. Many people will now be called upon to contribute to DNS, whether as voluntary contributors or even people who are self-employed. They don’t want their money to go in the NIS because they were afraid that it’s not going to be there for them.”

Gonsalves has sought to link “foreign operatives” to the murder of five men in Kingstown, on July 19, the removal of illegally erected embellishments at Brighton Salt Pond on July 20, and two attacks on Cuban health care workers, one in Kingstown and another in Georgetown in July.

Most recently, he has said that these foreign operatives have recruited journalists, who he did not identify, as part of a plot to bring down his government, which has been in office since March 2001.

However, Friday said the real cry in the country is the high cost of living that people are experiencing.

“… you go to the grocery store one day and you’re paying a certain price for something you go back two weeks later, the price has increased,” he said, adding that one retailer told him that the price of a particular item moved from $40 to $70 in a couple of months.

“So, the price of goods in the grocery store is what is oppressing the people of this country,” the opposition leader said, adding that grocers, too, have to make a living and pass on the high prices to their customers.

Friday noted that when the price of items increases, the government collects more money in VAT.

“… government actually profits from the higher cost of goods at the port. It should not make a windfall profit at the expense of the people of this country.

“This is why we say that you should reduce the VAT from 16% down to 13% so that it gives some relief to the people,” Friday said.

He said this is only fair because the government did not factor into its budgeting the higher cost of imports.

“This was caused by the Ukraine war and COVID and the disruptions that they said took place to supply chains. So, this is a windfall that they have got so it’s only fair that they pass that back on to the people.

“And similarly, when the cost of electricity continues to mount it can’t be that VINLEC because it’s a monopoly, just go around and cut off people and say well listen, you didn’t pay.”

Over the last few weeks, hundreds of people have flocked to the offices of VINLEC to make payment on their electricity bills after VINLEC began disconnecting accounts that were in arrears.

Friday said his party knows that people are required to pay for electricity.

“But if somebody ain’t for one month and they aint pay for two months, it now reach up to four and five months and you’re staring $500 to $600 in front of you and you can’t pay $120, it stands to reason that you won’t be able to pay $500 without having to make some dramatic sacrifice, which may come down to what you eat, what your children eat, or whether you could outfit them to go to school, or whether you allow the water to stay off,” the opposition leader said.

He said many people come to him with basic things such as water, gas, “and things that they used to be able to meet, they can’t anymore because they’re having to take care of first things first, which is food on the table.

“And when you go to the store now, because of the high cost of living, you have to pay more for goods. So, you have less to pay for the things that don’t press on you so urgently as hunger would on a daily basis.”

Friday said no parent wants to be unable to provide food for their children. 

“I mean, imagine what it is like in this day and age, you wake up in the morning, as a mother, a single mother, you have two or three children in the household, maybe an elderly parent and you have nothing to put on the table. Think about that, that happens in this country far too frequently. And relief is necessary.”

He noted that MP for East Kingstown, Fitz Bramble, an economist, recently released a video saying that the NDP would track the prices of food and other basic household items to highlight the impact of rising commodity prices on the standard of living that Vincentians enjoy.

“And it’s timely and we have put attention to this because we’re calling on the government to provide relief to the people of this country. You can’t just go on business as usual and say ‘well people have a fend for themselves’. That is not how we are in this country. We look after our most vulnerable in times of need, we all come together.”

Friday said the government can do something through VINLEC, for instance during August, ahead of the opening of the school year, and at Christmas.

“Take off the VAT from all of the domestic consumption of VINLEC. Why can they remove the VAT from those? Give homeowners a little bit more money.”

Friday said that for some households, the savings would not be much, but he noted that the reason the government imposed the tax is because it generates money.

“… and in fact, they had increased the number of persons who would pay VAT on electricity, domestic households, the threshold used to be 200 units, now it’s 150. So, they have the interest in raising money from that,” the opposition leader said.