NDP govt’s VAT-free day was illegal — Camillo

Former Minister of Finance Camillo Gonsalves has described as illegal the VAT-free shopping day that the New Democratic Party administration had on Dec. 19, keeping one of its major election campaign promises.

Gonsalves, who was minister of finance in the Unity Labour Party administration that the electorate rejected in the November 20205 election, after 25 years in office, said that the government needs to change the law to make a VAT-free shopping day legal.

He spoke on the weekly programme hosted by Opposition leader Ralph Gonsalves on the ULP’s radio station, Star Radio, but made it clear that the views he was expressing were his and not the party or opposition leaders.

“I ain’t knocking VAT free day. I ain’t coming here to knock VAT-free day,” he said, noting that it was an NDP campaign promise, adding that the government then had the right to implement it.

“I personally believe that it’s a gimmick. I personally believe that it doesn’t help the people that it’s supposed to be helping,” said the former East St. George MP, who lost the seat that Labour had held for the previous 30 years.

He said the VAT-free shopping day “doesn’t help the vulnerable.

“It helps people who have disposable income to buy big appliances and all them kinds of — that’s another point. I ain’t here to argue VAT-free day,” he said, adding that he was using the VAT-free day as a case in point.

Gonsalves, a lawyer, noted that the VAT Act mandate the payment of the consumption tax on items in the country.

“… nothing in the law authorises anybody to suspend the law. So, you can’t just come in and say, I hereby declare that the law does not apply today. You can’t just come in and say, ‘There shall be no VAT today’,” Gonsalves said.

“That is a violation of the law that exists. I don’t want to turn this into a courtroom, but there is nothing in any other law that would justify you simply declaring in Cabinet that you’re suspending a law. That would be illegal…

“But if you want to have a VAT-free day, what you have to do is come to Parliament and amend the VAT Act.”

He said the government would then have to amend the VAT Act to state that the Minister of Finance may, by publication in the Gazette, advise that the government is suspending the charging of VAT on specific items for a specific period.

“So, you adjust the law, because if the law does not allow you to do something, you don’t break the law, you don’t ignore the law,” Gonsalves said.

“You have the majority; go to Parliament, change the law, and you would have been easily able to do it.”

He noted the NDP supermajority in Parliament, where it holds 14 and the 15 seats, with only three members on the opposition benches.

The former finance minister, however, said this would have been inconvenient for the NDP government “because you promised you would have done it the same Friday you get elected.

“You ain’t get it do. It took you a few other days to get it do. But if you had to wait to go to Parliament, you would have probably had to wait till after Budget and all kind of things, and you didn’t want the inconvenience of it. So politically, it made sense for you to just declare it from the Cabinet.”

Gonsalves repeatedly reiterated that he was not arguing against the VAT-free day but maintained that it was illegal.

“So, what you should have done is amended the act. It would have taken you maybe another month, maybe another two months to get it done, and I know you want to do it before Christmas.”

He said the point he was making was that there was “a tension. There was a tug of war between the law and the political sentiment, and the decision was made at the highest levels to ignore the law and legislate from the cabinet”.

Gonsalves said some people would argue that there was “no harm, no foul” in light of the “big majority” since the amendment would have carried had the NDP gone to Parliament.

“‘And plus, I save a $500 on me deep freeze by Courts. So, it worked out for me and I’m happy,’” he said, quoting some of the responses to his position on the legality of the VAT-free day.

“But that’s not the mark. That’s not the mark. Because the next time the law is ignored, that the parliament is ignored, you might not be happy, but you’ve already agreed to a process where the majority legislates from the Cabinet and doesn’t legislate from the parliament,” eh said.

“The cabinet happens in secret,” he pointed out, noting that people attending Cabinet meetings have to take an oath of secrecy.

“The Parliament happens in public, so you understand what’s happening in the Parliament. …  there’s an understanding under our Constitution that the power of the purse, the power to tax, resides in the Parliament.

“The Cabinet doesn’t have the power to tax. The Parliament can give the Cabinet certain responsibilities, but the Parliament has to pass the law on taxation,” Gonsalves said.

“I ain’t knocking VAT-free Day. It’s a policy. The people support the policy. I don’t support it, the people support it, so implement it. It’s a promise that got you elected.

“But implement it properly and ignoring the law is a bad start … even if the outcome is politically desirable. We are a country of laws. We are founded on a law, big law called the Constitution,” he said, noting that all the other laws flow from the Constitution.

“We have lawyers and judges who defend and argue and protect those laws, and we have people who benefit from those laws, and we can’t bypass them when it is convenient.

“That’s important to remember, even if the outcome is desirable, because other laws will be passed in secret behind your back in Cabinet that you don’t know about.”

Gonsalves said that while he was talking about the action of the NDP and Prime Minister Godwin Friday, he was “talking democracy in small island states”.

He noted that the governments of Barbados, Trinidad and Tobago and St. Lucia also have large majorities in Parliament.

“There’s been a trend in the region of large majorities. The pendulum is swinging hard one way or the other in all of those cases, because I’m not making it partisan right now.

“I’m making it universal across all of these countries in which there is a massive parliamentary majority and a very, very small opposition, if any at all in the case of Barbados. In all of those situations, there will be a temptation by the governing party to govern from the Cabinet Room, to govern among themselves,” he said.  

“Democracies are built on the adherence to law, the respect for the majority, but the protection of the minority and those things have to be in place, and they are most in danger when you have a situation where the parliamentary situation is overwhelmingly one party, and we had to work on it,” he said.

“We had to work on it. And that is all of us have to work on it, supporters of the government, supporters of the ULP, and members of civil society throughout the Caribbean, we all have to work on that together.”