The Tribune

By TANYA SMITH-CARTWRIGHT

tsmith-cartwright@tribunemedia.net

LONG Island MP Adrian Gibson has taken the Davis administration to task about its plan to impose 10 percent value added tax on items that were once zero-rated.

The reimposition of VAT on these items comes as the government moves to decrease VAT from 12 percent to 10 percent.

During debate in the House of Assembly this week, Mr Gibson called an amendment to VAT legislation a “steak and caviar Bill”.

“I was taken aback as I read the proposed amendments to the VAT legislation,” Mr Gibson said. “Remove VAT of two percent off high-end items and increase and apply VAT of 10 percent on everything.

“Some would call that smoke and mirrors. The buying habits of the poor are far more frequent than the buying habits of the rich and middle class.

“When the public heard the PLP’s platform – which asserted that VAT was being decreased to 10 percent – they took it at face value; many persons believe that this meant that this reduced VAT rate took into account the zero-rated items and that the same would remain as such.

“Many believed that the VAT burden on all other goods and services would be reduced to 10 percent, not the across the board increases we see today. This is not what Bahamians were led to believe would occur.”

Mr Gibson said while the government of Trinidad and Tobago recently introduced VAT-free food staples and bread basket items on November 1, the “New Day” government of The Bahamas has gone in the opposite direction and applied VAT on previously zero-rated staples.

He said he regards this as the government paying for its promised VAT reduction on the backs of the poor, most vulnerable and struggling families.

“Much like the much ballyhooed mortgage relief, the promised free electricity to a certain segment of BPL customers... This too turned out to be a great PLP hoax,” he said.

“We should remind every mother, every parent in this country, to think about the promise of the new government to make things easier... as they change diapers... now made more expensive to feed their hungry children... again soon to be more expensive.

“When calculated out of 100 percent, that two percent represented 17 percent. In other words, the rich got a 17 percent tax reduction and the poor a 100 percent tax increase to pay for it. Imagine this. Water - gone up! Bread - gone up! That’s your average loaf — hamburger bread, hotdog bread, coconut tart and other tarts — as flour is now 10 percent as well.”

At this point Mr Gibson removed items from a bag he brought to Parliament as he continued to itemise food products that he said would be increased in cost due to the VAT change.

He continued, “Rice and grits and flour — gone up! Tuna, mackerel and sardines — gone up! Baby food — gone up! Spaghetti and soup in the can — gone up! Soap and detergent — gone up! Mustard, tomato paste, mayonnaise, cooking oil — gone up! Medicine — gone up! Insurance — gone up! Chicken in the bag — gone up!

“They used to say tags on everything — well it’s now VAT on everything!

He said the roadside vendors and fast-food chains will all now have to pay more for items like bread, ketchup, mustard, mayonnaise and relish.

“The cost of living has just increased. It is no wonder that the government is hoping to set off its increase to the cost of living by raising pensions, by raising the minimum wage.

“How can this minimum wage ever be felt if the poor still have to take it and spend it on paying higher taxes just to eat? Home insurance is already expensive. How many people will now opt not to have insurance coverage on their homes just so they can pay to eat?

“How many families will now take the gamble and go without already expensive medical insurance now that it will increase by at least 10 percent? How many people will die because they had no insurance coverage, having to choose which of the suddenly more expensive life options to take, food or home insurance or life insurance or medical insurance?”