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| Brantley: VAT Bill Without Rate a ‘Travesty’ |
| By Sheena Brooks |
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Hon. Mark Brantley |
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The Value Added Tax Bill was given its first reading in the Federal Parliament on Wednesday, June 30. However, the rate for the new tax system was noticeably absent from the legislation.
During an exclusive interview with The Observer, Leader of the Opposition Hon. Mark Brantley revealed that in every section of the Bill where the rate was supposed to have applied, there instead was a blank space. He opined that the VAT rate was intentionally being withheld from the Opposition and the public.
“I think it’s a deliberate political strategy to disguise and obfuscate what the rate of VAT is likely to be. The Prime Minister did an interview with CMC (The Caribbean Media Corporation) a few months ago in the Bahamas in which he suggested a rate of 19 percent. I have had words with technocrats who have said that a rate of 19 percent may not solve the problems they are seeking to solve, so they may go higher. Now I’m hearing that because of public discussion on the matter, and a sense of anxiety expressed in the public domain, that they may well propose a lower rate,” he said.
Brantley said he was astonished to discover that the extensive VAT legislation distributed to parliamentarians on Wednesday was lacking this critical bit of information. Not only were opposition parliamentarians put at a disadvantage by this, according to their Leader, but so was the average citizen.
“When I looked at the legislation, and it’s a lengthy bit of legislation, my first instinct was to see ‘what is the proposed rate?’ and all the areas that speak to the rate were blank. At this juncture the consultations only speak to the tax mechanism and how the VAT is to be administered and collected and the rate of tax is omitted. A householder or business cannot start to budget how much extra or less they will have to pay for goods and services, or what it will cost to import items for resale,” said Brantley.
He told The Observer that no sensible debate on VAT could be undertaken without a rate, since the figure would determine the tax’s effect on the economy.
“This is a fiscal measure, so clearly the rate at which VAT is to be applied is a very critical question. The debate, for example, at a rate of 10 percent would be considerably different to the debate at 20 percent. The absence of a rate in the legislation does not allow us as parliamentarians to have the kind of sensible dialogue with our constituents as we would like to. I can’t do any calculations; I can’t tell a constituent whether the cost of living will be greater or lower, as the case may be, because the rate determines all of that. While the Bill as it is framed lays out the mechanism for VAT, the critical component, which is the rate, is missing. Quite frankly I think that it is a travesty to distribute legislation to parliamentarians and leave out critical information,” Brantley said.
As the clock ticks away toward the November 1st VAT implementation date, Brantley said he is of the opinion that Prime Minister Dr. Denzil Douglas will wait until the Bill is presented to parliament for its second reading before revealing the rate. He also questioned the Labour Cabinet’s claims of ignorance regarding the VAT rate.
“I suppose that the PM and Minister of Finance will come on the day of the debate and produce the rate out of his back pocket, and we will then be forced to debate that on the spot. That would be unfair to us. The issue for me, so far as the rate is concerned, is that the setting of the rate is a matter for the technocrats, since it would be influenced by certain economic and financial data that I as a member of the Opposition would not necessarily have. So I don’t understand how it is that the government is saying they don’t know what the rate is going to be, because that is something that should have already been suggested to them by the technocrats and the people who have studied this,” he said, continuing, “I’m hearing some Labour parliamentarians saying that they themselves don’t know the rate, but if that’s the case why are they bringing the matter forward?”
Speculation one way or the other could easily be avoided Brantley maintained, adding that the reluctance to announce the VAT rate could be an indication of a high tariff. He posited that fear of public fallout could be the motivating factor behind the government’s unwillingness to divulge the information.
“I think all this speculation could be avoided by the government simply saying ‘this is the rate we have in mind’. It seems to me the government has a high rate in mind, but is afraid to say for fear of some kind of political backlash. It is what it is, and we are where we are. Having committed themselves to the VAT by November, they cannot continue to withhold this information from the public. … If they as a government do not yet know the rate they are seeking to apply, then obviously we are not ready for VAT,” he concluded. |
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