The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

Some industry stakeholders have already seen the draft Value Added Tax (VAT) legislation, a Cabinet minister yesterday confirming it would be available for full public consultation soon.

Michael Halkitis, minister of state for finance, said: “We will begin to share the legislation very shortly. I think it’s been shared with some of the industry partners.

“We want to coordinate a public launch so that when we launch it it is not just given to the public without a sort of explanatory framework on exactly what the Government is trying to do.

“The draft is complete, I think it’s ready for discussion, and it will be shared with members of the public. It has already been shared with certain elements of the business community.”

Mr Halkitis said VAT was merely a part of a wider fiscal reform effort by the Government, which also includes reducing public spending.

“We have to have a combition of expenditure controls and new revenues that will total that,” he added.

“This whole reform process is not simply the Government saying we have to put this new tax on.”

Mr Halkitis said the Goevrnment was still looking at ways to “trim the fat”, adding that it was eying a fiscal adjustment of $500 million over the next four years.

“We asked all of the Government agencies to cut their budgets by 10 per cent, and submit to us a proposal whereby the amount of money they got from government would decrease by 25 per cent in the second year. We have been going through a number of cost cutting measures within the Government. Our programme consists of expenditure control and doing a better job of collecting the revenue out there, “ said Mr Halkitis.

He added that the Government has sought to beef up its real property tax collection efforts via its amnesty programme.

“There was a number of $400 million floating out there,” he said in relation to estimates of uncollected real property tax.

“The fact is our records have not been kept up to date. We’re doing some things to change that. We’re getting a new IT system for real property tax, we will be looking to modernise the legislation. We have just had the amnesty programme.

“We have also engaged some individuals in the private sector to help us and ensure that our tax roll-out is complete, meaning all those who should be paying are paying.

“The fact of the matter is we have thousands of property tax bills that go to general delivery at the post office, which in effect means that no one collects it. We are attacking that problem.

Financial Secretary John Rolle said yesterday that the Government has a $600 million annual payroll, was incurring $230 million in interest payments on its borrowings, and was paying out $200 million in investment incentives, with the tourism sector getting 25 per cent of that amount.