The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Government has made a “poor case” as to why this nation must implement a Value-Added Tax (VAT), a leading businessman said yesterday, questioning: “If not VAT, then what’s the plan?”

Dionisio D’Aguilar, president of the Superwash laundromat chain, while applauding the Government for initiating discussions on tax reform, said that “doing nothing” with respect to the country’s growing deficit “was not an option”.

Prime Minister Perry Christie on Wednesday hinted that he might be open to pushing back the Value-Added Tax (VAT) target implementation date of July 1, 2014.

“July has been established as a date, but for me as Prime Minister, the date in my mind is when the Government is in a position to satisfy me that it’s ready for implementation,” said Mr Christie.

“That’s not a July, August September or October. That is the real assessment that we are ready for it, and that the country is ready for it in terms of the preparation of businesses.”   

To that suggestion, Mr D’Aguilar said: “Doing nothing is not an option. If the Prime Minister decides to delay it he needs to have another plan.

“The Government needs to raise $100-$200 million next year. Some very tough decisions need to be made. The situation from a deficit standpoint is desperate. I do commend the Prime Minister and the Government for starting the discussion. The Government needs to do something to stimulate the economy.”

Mr D’Aguilar added: “The Government has made a poor case of why we need this VAT. We all know that the Government has a major deficit problem, but I don’t think that the Government has done a great job of sensitising the public to the importance of trying to correct this deficit.

“I think a lot of people are against VAT and any type of tax because of the burden it will place on them. The Government has not really sensitised  the people to the fact that if we do not deal with this debt now, then the IMF and the rating agencies at some time in the future are going to absolutely slam us. While there may be a lot of people that are against VAT, if not VAT, then what?

“Some people say the Government should collect the taxes it already has. If the Government continues collecting taxes in the same way it has in the past, the situation will not improve. The Government needs to come up with a different way to collect taxes. Sending out a bill and waiting for people to pay just doesn’t work. When they implement VAT there will be widespread non-compliance,” Mr D’Aguilar warned.

He echoed the suggestion from others in the private sector, who have called for VAT to be phased in over three years. “I know that come July 2014, if VAT is not implemented, the Government better have a plan to begin to address the deficit problem or we will be downgraded again. If not VAT, then what’s the plan?” Mr D’Aguilar repeated.