Gonsalves doubts VAT-free shopping generated $28m in sales

Leader of the Opposition, Ralph Gonsalves, is rebutting the New Democratic Party (NDP) government’s announcement that the nation’s first VAT Free Shopping Day, held on Dec. 19 generated EC$28 million in sales.

Prime Minister and Minister of Finance, Godwin Friday, said in the 2026 Budget Address in Parliament on Monday that the Inland Revenue Department reported sales amounting to EC$28 million.

“VAT Free Shopping Day held on Dec. 19, 2025, proved to be a successful and well-received initiative, delivering tangible benefits to consumers and the wider economy,” the prime minister said in his address.

But Gonsalves, in his response to the Budget Speech, on Tuesday, maintained his view that the event was a “gimmick” and offered little or no relief for the working people or developmental impact.

“I don’t think the prime minister will come and quote public servant, they advised. I will contest to the face of the Comptroller of Inland Revenue, his number of turnover of $28 million. I’ll contest it vehemently,” the opposition leader said.

Gonsalves said that the relief from domestic VAT offered was hemmed in by restrictions.

For example, the purchase of vehicles or food at a restaurant or a hotel were exempted from the VAT Free Shopping Day.

The opposition leader said that while his party, the Unity Labour Party (ULP), was in office, it was estimated that VAT would have generated EC$159 million in 2025.

“Now bear in mind that in 2024, we actually collected EC$130.2 million,” Gonsalves said.

He told listeners that there are 300 shopping days in a year, plus 52 Sundays and 14 holidays.

The opposition leader said that, based on his calculations, assuming the full EC$159 million were collected, the average collection per day would be EC$530,000.

“Now, if you get the average VAT of $530,000, then do the math further. How much would you collect to get 530? Well, do the math and you get EC$3.8 million,” Gonsalves reasoned.

Therefore, on an ordinary day, the turnover would amount to about EC$4 million, the opposition leader said.

“If you want to do a proper analysis, tell me what happened also in … the seven days before they’ve had free day because nobody probably bought anything for the seven days before — hardly anything. And nobody bought anything … for the five days or so after.

“But I’m saying there’s no way that you could have a turnover legitimately of $28 million,” said Gonsalves.

He gave the example of Barbados, saying that the country lost BDS$3 million on its VAT-free shopping day, despite the absence of restrictions and its population being three times that of St Vincent and the Grenadines.

Lawmakers are debating an EC$1.9 billion budget, the first presented by the NDP since it came to office on Nov. 27, after 27 years in opposition, while Gonsalves was prime minister for that time.

The debate continues.