The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

 THE incoming administration must provide immediate certainty on its tax plans, the Chamber of Commerce’s chairman urging it to maintain the 7.5 per cent Value-Added Tax (VAT) rate for at least 12 months.

Gowon Bowe told Tribune Business that the new government has to immediately clarify its tax and fiscal plans, calling on it not to suddenly alter the VAT rate even if it was considering such a move.     

“Whichever party forms the next government needs to very quickly say the state of revenue collection, the success of the compliance initiatives that are expected to yield significant fruits, so that they can make a clear statement to businesses and the citizens of this country that there won’t be any immediate changes or give forewarning and notice,” said Mr Bowe.    

“While they can work around tax strategies with Customs duties and Business Licenses, VAT is by far the most far-reaching form of taxation that we currently have. Even a 1 or 2 percentage point increase, without the reduction of removal of other taxes, is going to have a dampening effect on economic growth and it is not something that you want to just spring upon the economy.”

Mr Bowe emphasised that he was not dictating to the incoming administration, but added: “The country and consumers cannot afford increases in the tax burden at this time. We are going to need to have continued  collaboration between the public and private sector. What has been achieved with VAT, the minimum wage and labour legislation is something that should be built upon.”

VAT was implemented on January 1, 2015, at a rate of 7.5 per cent on most goods and services. Outgoing Prime Minister Perry Christie explained earlier this year that  $1.14 billion in VAT revenue was accumulated during 2015 and 2016, insisting that not one dollar of the money has been “frittered away” or spent “surreptitiously”.