The Tribune

EDITOR, The Tribune.

This question about Value Added Tax comes late, and I take full responsibility for it not being presented in a timely manner. I was reluctant to even bring it up; there were so many persons more learned and qualified than myself speaking on the issue that I expected this question to be addressed, but it never was.

The definition of Value Added Tax has a phrase in it that has been ignored in all of the “discussions” to this date, and this indiscretion may be the cause of the programme running into problems. Here is the definition: A type of consumption tax that is placed on a product whenever value is added at a stage of production and at final sale.

The definition informs us that a Value Added Tax regime is applied to products that are being “produced”. The concept is based on the presumption that whatever is being taxed has a market value that is able to support the tax.

It looks like there was no homework done by the government or those that the responsibility was given to. If they had done their work they would have seen that it was important for the necessary production entities to be in place, even before Value Added Tax was considered.

Presently, those who are in charge of the process are going about it backwards, they would like to place a tax on a platform that will not be able to support it in the first instance; and the government is looking for a sustainable revenue flow. What the present tax amounts to is a flat tax of 7.5 per cent with promises from a government in a struggling economy that they are going to fulfil their obligations regarding reimbursement.

Except for a radical improvement in the economy we are headed for a “grinding down” of the economy as we go into 2015. The fact that the VAT programme has not reached its targeted merchant groups in the way it should have at this point is not helping the situation.

There is a hint of common sense coming out of this if it is true that the larger businesses have been a given a February date for normalising their stock. However, as business goes in the real world, a year would have been better.

We are caught up in a twisted circumstance, where those of us who are a part of the status quo do not see what the deal is. Some of us (who should know better) seem to be unconcerned as long as we can raise the sticker price and recoup what the government is asking for. We have made the mistake of not looking at what Value Added Tax is and how it should operate. We have pulled a name out the air that does not really apply to what we are attempting to do. This is a tax that has no support and therefore, unsustainable.
 I also read where the PLP convention in November is being moved to a later date. I find that to be strange news; if 2015 goes like I think it is going to, there will be a change in the leadership of the PLP whenever that “Convention” is staged.

EDWARD HUTCHESON

Nassau,

October 6, 2014.