How much will Government collect?
The government expects to collect $8 million directly from the increase in the CSC!
This estimate does not include the additional amounts the government will also get from VAT (i.e. after VAT is charged on goods whose value has been increased by the higher CSC).
In other words, the increase is expected to earn the same amount or more than the government earned additionally when it raised VAT from 15% to 16%, five years ago.
So, this is not a small thing. The Minister and others in the government would like us to believe it is a small thing.
It amounts to a very significant tax increase that will affect everyone- rich and poor, employed and unemployed—directly.
Every time we buy something in the store, or someone sends something for you from overseas, you will be paying the tax!
What it this money to be used for?
The money is not to be used for spending on things here in SVG, it will not be used to help those suffering more from COVID economic fallout! It is to be used to pay various regional organizations to help them to cover their operating expenses.
The Minister of Finance sought to explain it when he said in his Budget Address as follows: (See p. 86 Budget Address 2021)
The following organizations were mentioned in the Budget Address and provided for in 2021 Estimates:
Caribbean Public Health Agency (CARPHA) ($113,000 in 2021); Pan-American Health Organization (PAHO) ($60,000); Regional Security System (RSS) ($2M); Caribbean Disaster Emergency Management Agency (CDEMA) ($255.7K), CARICOM Implementing Agency for Crime and Security (IMPACS) ($278,450); Caribbean Institute of Meteorology and Hydrology ($250,000); Caribbean Meteorological Services($40,610); Seismic Research Centre ($400,000); Eastern Caribbean Civil Aviation Authority ($900,000); and the OECS ($3.18m).
CARICOM (1.16m) and the Eastern Caribbean Supreme Court ($2.2m) were also added later
We do not question the important roles that these regional bodies play for SVG and the Caribbean. But we must question why now a tax increase for them?
Why must the government impose a special tax on the people of SVG to pay these organizations at this difficult time?
This question is important not only because of the special times we are in as a result of the COVID 19 pandemic, but also because the government imposed a similar tax in 2015 for the same reasons that should have paid all of these organizations already!
The 2015 Estimates provided the following sums for these organizations:
Caribbean Public Health Agency (CARPHA) (Not mentioned)
Pan-American Health Organization (PAHO); $115,000.00
Regional Security System (RSS); $1,800,000.00
Caribbean Disaster Emergency Management Agency (CDEMA) $100,000.00
CARICOM Implementing Agency for Crime and Security (IMPACS) (Not mentioned)
Caribbean Institute of Meteorology and Hydrology; $155,000.00
Caribbean Meteorological Services; $87,000.00
Seismic Research Centre $190,000.00
Eastern Caribbean Civil Aviation Authority $485,000.00
Eastern Caribbean Supreme Court $2,100,000, Total $8,186,000.00.
Over the years, the government came to Parliament, especially in the Estimates it presented and set out the amount of money needed to pay each of these regional organizations. Parliament approved it (because they voted for it).
What did they do with that money? The government obviously spent on other things and now they are coming to the people to ask for more money through raising the CSC, again!
The people of this country are going through hell right now! We are going through a period of great economic pain and great uncertainty brought about what the immediate future holds.
We were put in this position by bad financial management, that was made a lot worse by the COVID 19 Pandemic and the way the government has mishandled it.
The current outbreak of COVID 19 with the reluctant acknowledgment by the government of community spread, has clearly set us back even more.
Economic activity is directly affected by how the COVID 19 pandemic is handled in any given country. Simply put the safer the people of the country feel the more they are inclined to engage in economic activity. The outbreak in SVG has made people insecure and unwilling to engage in the usual activities that keep the economy moving. That is understandable, because personal health and safety come first.
The government should not be imposing more taxes on people now. They people and economy cannot bear it. You don’t do it because you have the power to do it; Government must look out for the people, especially now!
Governments all over the world are looking for ways to put money into citizen’s pockets, not take money out of their pockets.
Why is the SVG government not doing same?
The government is walking to the wrong beat of the wrong drum.
In other words, it is not in tune with the times.
This tax is evidence of a government that is out of touch with the real situation of real people.