VAT Is Needed Due To The Large National Debt

Basseterre, St. Kitts – Nevis
People’s Action Movement
June 12, 2010

The most recent Post Cabinet Briefing dated June 9 2010 outlined several austerity measures that are intended, we are told, “to respond aggressively to the serious fiscal challenges facing the government at this time.” In the first case it is interesting to finally see some acknowledgment of the fact that this government is facing “serious fiscal challenges” but as usual it is disappointing to note that the true scope and causes of the problem remain willfully unrecognized. The catastrophic National Debt and reckless and irresponsible government expenditure are the white elephants in the Cabinet that no one there can see but that are the real reasons for our sorry state.

Three of the measures identified jumped out at me namely: “freezing of travel except in cases ….it can be very strongly justified”, “relooking the structure of the social services levy to increase its scope” and “reexamining the cap on the number of taxi and bus owners that will be able to receive duty free concessions on vehicles and spare parts”. These particular measures tell a worrisome story about the state of this country.

Firstly it is simply scandalous that travel expenses for this government are such that freezing them could have a material impact on the government’s balance sheets. It raises serious questions about any possible benefit that the country could have gained from the hundreds of thousands or even millions or dollars that have been wasted on global joyrides. Additionally, it remains to be seen whether the prime minister would curtail his own travelling or just relegate this cost cutting to his underlings.

However the next two measures are really alarming. What do they mean by expanding the scope of the social services levy? The only two ways that could happen would be to either increase the levy or increase the number of people who pay it. Either way, this would be an additional tax when we are already dreading an impending VAT.

The loss of the duty free concession would be a real blow to taxi and bus operators who are already really struggling. How much more can these ordinary people take? This myopic Labour government thinks that it can simply take from the people with no end in sight but Kittitians and Nevisians are only human. This much privation will lead to hunger and we know what happens to a hungry mob.


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