The main opposition New Democratic Party (NDP) is calling on Finance Minister, Camillo Gonsalves, to give an “ironclad commitment” that the ruling Unity Labour Party (ULP) government will outline no new taxes when he delivers the 2022 national budget later this year.
Last year, the Government presented an EC$1.2 billion (One EC dollar=US$0.37 cents) budget to Parliament.
NDP and Opposition Leader, Dr Godwin Friday, speaking on a radio programme on Monday, said prior to the coronavirus (COVID-19) pandemic, the economic situation in St Vincent and the Grenadines was bad and that EC$0.41 cents from every dollar collected by the government went to servicing the national debt.
“So, before the pandemic, we had these problems so let’s not give the impression that all of a sudden that things have gone south because of the pandemic, because of things that are happening, because of Soufriere and so forth,” Friday told radio listeners.
“The structural problems we had before and they have now been exacerbated and they have now revealed, quite frankly what we have been saying in the past,” he said on his weekly appearance on the NDP’s radio programme.
Friday said that in the midst of the pandemic, Gonsalves, increased the Customs Service Charge, which is expected to generate an estimated EC$10 million annually.
He said the new tax has to be borne by the population.
“It comes out of people’s pockets because that is collected when the increased service charge is incorporated into the cost of the goods that people buy in the shops.
“So it’s the ordinary citizens, who, essentially, are paying it. We know that the government finances are squeezed but so, too, are the finances of the ordinary people. They exacerbated the problem as well by the way in which they had been managing the finances of the country over the years and we have complained about this repeatedly.”
The Opposition Leader noted that the government is preparing the budget, to be presented towards the end of the year or early in 2022.
“The Minister of Finance must give the people of this country an ironclad commitment that there will be no new taxes in his new budget when that comes to the Parliament.
“There must be a commitment that you cannot take money out of people’s pockets again at this time when they are feeling the pain. If you can’t put money back into people’s pockets, at least leave them with what they have,” Friday said.
“And so there must be a commitment by the minister of finance, I am calling on him to give that commitment that there will be no new taxes when the budget comes about; when he prepares the budget for 2022.
“So this is something that we are going to hold the government accountable on and continue to insist that they do not abuse, misuse, disregard the guardrails that have been established over the years to ensure that the economic affairs of the country are managed properly, that the finances of the government of the government are managed properly and these are all in the Constitution; they are in the Finance Administration Act; they are in the audit act.”
Friday told radio listeners that there were very serious economic problems here and that in 2019 there was a growth rate of about 0.5 per cent with an average of 1.3 per cent over the last five years.
“That is no growth in an economy like ours and that is why the poverty rate in our country has been increasing and why the people have been feeling it to the point where they have been complaining about the cost of living.”
He said Gonsalves has already indicated that there will be price increases as a result of supply chains being disrupted during the pandemic.
“We have heard some of those theories. But the point is that we expect that there may be economic disruptions caused by COVID. That’s happened worldwide but we have to put ourselves in a position to be able to respond, to react to it and not exacerbate it by our own policies here in the country,” Friday added.