IT remains to be seen just how successful this government can ever be in reducing the national debt, which Minister in the Ministry of Finance, Dr.Ubaldus Raymond, says currently stands at $2.9 billion.
With vehicle licence fees reduced recently as per the “Five To Stay Alive” plan promised to the electorate by the United Workers’ Party during the last general elections, Saint Lucians are now waiting anxiously to see a reduction in the Value Added Tax (VAT).
By the end of October, the new VAT rate is expected to be announced. Whispers of what that new rate will be remain just that for now because preliminary assessments are said to be still ongoing, including getting a true picture of the nation’s fiscal state.
According to Dr. Raymond, government’s approach to tackling the debt problem will be two-pronged: increasing efficiencies in the money-generating sectors (including the public sector) and amortizing debt.
However, Dr. Raymond’s explanation that government’s decision to roll over its debt due to limited finances while not increasing the debt stock has not resonated with critics who argue that rolling over debt redounds to debt extension and, therefore, increased debt.
The minister’s effort to ameliorating our debt crisis remains to be seen. But despite several pronouncements by the government that it inherited much more of a financial mess it previously anticipated, Saint Lucians are expecting a decent reduction in the VAT rate by the prescribed date. Moreover, they might not even buy into an extension of that date, either.
With tourism facing its myriad of challenges and agriculture and manufacturing still waiting on the real kick-start owed to them for years, government might well use these and previously-mentioned circumstances as factors to either delay the new VAT rate or find it difficult to grant Saint Lucians at least a third off the current 15% rate.
The current government got into office with an 11-6 seat mandate, predicated heavily on its pledge to reduce the VAT rate. While it is understandable that government is facing its own challenges, citizens, too, are still trying to come to grips with the rising cost of living.
Come October month-end, citizens are expecting a decent VAT rate that actually eases their squeeze. If the government fails to deliver, a bad precedent would have been set.