One month after the government announced its decision to add one percent to the five percent service charge at the Customs, the Public Service Union (PSU) is calling for it to be cancelled citing increase in cost of living, creating more poverty and negatively impacting the construction industry.
In his budget address in early February, Minister of Finance and Economic Planning Camillo Gonsalves on Monday announced government’s intention to pass legislation to allow for an increase of one percent to be added to the Customs service charge which is expected to yield an increase of $10 million which will go towards funding a number of the regional organizations.
“Challenges that we face today have highlighted the indispensable role played by a number of regional organizations in the governance, safety and resilience of St Vincent and the Grenadines. Our response to the pandemic to date would have been impossible without the support and technical experience of the Caribbean Public Health Agency (CARPHA), the Pan-American Health Organization and the Regional Security System (RSS).
“Similarly, our monitoring analysis and preparation for any eventualities at La Soufriere Volcano were made effective through our cooperation with the Caribbean Disaster Emergency Management Agency (CDEMA), the CARICOM Implementing Agency for Crime and Security (IMPACS), the Caribbean Institute of Meteorology and Hydrology as well as the Caribbean Meteorological Services and the very important Seismic Research Centre,” Gonsalves said then.
Gonsalves also said the increase will move the Customs Service Charge from 5 percent to 6 percent, “a rate that is still among the lowest in the region. We expect the measure to yield $9.6 million this year which represents less than 1.5 percent of budgeted revenue.”
PSU president Elroy Boucher at a press conference at the union’s headquarters on Wednesday said that while the reason proffered by the government for the one percent increase may be of good intention, it must be noted that such increase at this time of Covid-19 pandemic will ultimately translate into a further increase in the price of imported consumer goods. He also said that undoubtedly government will generate more revenue from the increase in customs service charge and, further, Value Added Tax (VAT) will also increase in the short and medium term because the compounded price and the value of goods purchased by consumers at retail outlets will be higher.
Boucher referred to an article published on December 9, 2020, and titled ‘COVID-19 is driving up food prices all over the world’, in which the International Labour Organisation (ILO) reported that the food component of the Consumer Price Index (CPI) had increased at a much faster rate than the overall CPI in all regions of the world.
Boucher said the article stated that, globally, the prices of food products in August 2020 were on average 5.5 per cent higher than in August 2019 and that increases in food prices can have a major impact on the living standards of lowerincome households, which generally spend most of their income on food. He said that, according to the article, even a small increase can confront the members of such households with difficult decisions.
The PSU president said the International Trade Centre (ITC) cited the fifteen (15) member CARICOM grouping as importing 94 % of its food from United States, and, based on that information, “one can easily perceive how the application of a one percent increase in customs service charge will further exacerbate the price of imported foods in St. Vincent and the Grenadines.”
He referred to the increase in price of Brent Crude Oil to around US$63.00 a barrel in mid-February 2021, which is said to be the highest since the COVID-19 outbreak in December 2019, and which will have its impact on various sectors.
Boucher brought the reality closer to home referring to an article published in the February 19, 2021, edition of the Searchlight newspaper, where General Hardware Supplies proprietor Leonet Anderson stated that there had been a tremendous increase in prices of many goods on the world market, including on lumber, steel, plywood and light hardware. He pointed out where Anderson lamented that the price of steel had risen by more than 50 percent on the world market and where the cost of manufacturing and shipping increased dramatically since the Covid-19 pandemic; shipping costs, in some instances, having increased by about 300 percent.
Boucher also referred to Lance Oliver, proprietor of Rent and Drive Ltd. (importer of auto parts), who similar sentiments about global price increases and who intimated that there had been an increase in motor oil prices since the pandemic.
“The increase in the price of goods in the local market will erode the purchasing power of the Vincentian consumer.
Furthermore, it can potentially increase the poverty rate in St. Vincent and Grenadines, which some analysts have put as high as 36% of the population. It may also drive many persons in the vulnerable categories of the population into poverty as a result of exogenous and endogenous shocks. Higher costs for lumber, steel and other construction materials will adversely affect the construction sector, which employs thousands of contractors, masons, carpenters and labourers. The ability of these workers to earn an honest living will certainly be impeded,” Boucher told reporters.
The union leader further stated: “Given the extenuating circumstances, it is the view of the Public Service union, that it may be imperative for the government to refrain from increasing the customs service charge until the world is out of this pandemic mode and when the global economy begins to show an upturn performance. In addition, it will be more prudent to do so when prices for commodities or raw materials on the world market begin to show signs PSU calls on government to cancel one percent increase on Customs service charge
One month after the government announced its decision to add one percent to the five percent service charge at the Customs, the Public Service Union (PSU) is calling for it to be cancelled citing increase in cost of living, creating more poverty and negatively impacting the construction industry.
In his budget address in early February, Minister of Finance and Economic Planning Camillo Gonsalves on Monday announced government’s intention to pass legislation to allow for an increase of one percent to be added to the Customs service charge which is expected to yield an increase of $10 million which will go towards funding a number of the regional organizations.
“Challenges that we face today have highlighted the indispensable role played by a number of regional organizations in the governance, safety and resilience of St Vincent and the Grenadines. Our response to the pandemic to date would have been impossible without the support and technical experience of the Caribbean Public Health Agency (CARPHA), the Pan-American Health Organization and the Regional Security System (RSS).
“Similarly, our monitoring analysis and preparation for any eventualities at La Soufriere Volcano were made effective through our cooperation with the Caribbean Disaster Emergency Management Agency (CDEMA), the CARICOM Implementing Agency for Crime and Security (IMPACS), the Caribbean Institute of Meteorology and Hydrology as well as the Caribbean Meteorological Services and the very important Seismic Research Centre,” Gonsalves said then.
Gonsalves also said the increase will move the Customs Service Charge from 5 percent to 6 percent, “a rate that is still among the lowest in the region. We expect the measure to yield $9.6 million this year which represents less than 1.5 percent of budgeted revenue.”
PSU president Elroy Boucher at a press conference at the union’s headquarters on Wednesday said that while the reason proffered by the government for the one percent increase may be of good intention, it must be noted that such increase at this time of Covid-19 pandemic will ultimately translate into a further increase in the price of imported consumer goods. He also said that undoubtedly government will generate more revenue from the increase in customs service charge and, further, Value Added Tax (VAT) will also increase in the short and medium term because the compounded price and the value of goods purchased by consumers at retail outlets will be higher.
Boucher referred to an article published on December 9, 2020, and titled ‘COVID-19 is driving up food prices all over the world’, in which the International Labour Organisation (ILO) reported that the food component of the Consumer Price Index (CPI) had increased at a much faster rate than the overall CPI in all regions of the world.
Boucher said the article stated that, globally, the prices of food products in August 2020 were on average 5.5 per cent higher than in August 2019 and that increases in food prices can have a major impact on the living standards of lowerincome households, which generally spend most of their income on food. He said that, according to the article, even a small increase can confront the members of such households with difficult decisions.
The PSU president said the International Trade Centre (ITC) cited the fifteen (15) member CARICOM grouping as importing 94 % of its food from United States, and, based on that information, “one can easily perceive how the application of a one percent increase in customs service charge will further exacerbate the price of imported foods in St. Vincent and the Grenadines.”
He referred to the increase in price of Brent Crude Oil to around US$63.00 a barrel in mid-February 2021, which is said to be the highest since the COVID-19 outbreak in December 2019, and which will have its impact on various sectors.
Boucher brought the reality closer to home referring to an article published in the February 19, 2021, edition of the Searchlight newspaper, where General Hardware Supplies proprietor Leonet Anderson stated that there had been a tremendous increase in prices of many goods on the world market, including on lumber, steel, plywood and light hardware.
He pointed out where Anderson lamented that the price of steel had risen by more than 50 percent on the world market and where the cost of manufacturing and shipping increased dramatically since the Covid-19 pandemic; shipping costs, in some instances, having increased by about 300 percent.
Boucher also referred to Lance Oliver, proprietor of Rent and Drive Ltd. (importer of auto parts), who similar sentiments about global price increases and who intimated that there had been an increase in motor oil prices since the pandemic.
“The increase in the price of goods in the local market will erode the purchasing power of the Vincentian consumer. Furthermore, it can potentially increase the poverty rate in St. Vincent and Grenadines, which some analysts have put as high as 36% of the population. It may also drive many persons in the vulnerable categories of the population into poverty as a result of exogenous and endogenous shocks. Higher costs for lumber, steel and other construction materials will adversely affect the construction sector, which employs thousands of contractors, masons, carpenters and labourers. The ability of these workers to earn an honest living will certainly be impeded,” Boucher told reporters.
The union leader further stated: “Given the extenuating circumstances, it is the view of the Public Service union, that it may be imperative for the government to refrain from increasing the customs service charge until the world is out of this pandemic mode and when the global economy begins to show an upturn performance. In addition, it will be more prudent to do so when prices for commodities or raw materials on the world market begin to show signs