-President
THE value added tax (VAT), which has replaced several taxes, is being made into a political football, and many of the stories are exaggerated, President Donald Ramotar said Saturday evening during an Interview with the National Communications Network. “What is needed is a proper study, an unbiased and objective study of its impact to determine what to do about VAT, because it is a very important tax…,” the Head of State said.
VAT was introduced on January 1, 2007, together with an Excise Tax, which together has replaced six taxes. These included the consumption tax, the purchase tax, the hotel accommodation tax, the telephone tax, the service tax, and the entertainment tax.
He added that he made public declarations, while on the campaign trail, before general elections last November, to revisit VAT. As such, upon his ascension to office, he established a committee to execute a comprehensive analysis on the tax.
Accountant Ronald Ali, economist Dr. Cyril Solomon and prominent businessman Clifford Reis are leading the review process.
“This committee still has to do its work… I didn’t want to pre-empt their work; there are many views on this, you can find views split right down the middle on VAT,” the Head of State said.
He said that there is a general recognition of the importance of VAT.
“Professor Clive Thomas, when he was a member of parliament, was the first person that advocated for VAT tax…he was the first one to speak about the need to have a VAT tax within the society itself…VAT itself ,when it was passed in the National Assembly, was passed unanimously…there were no objections…when you revisit the speech of people like Winston Murray and the others…they spoke of the importance of VAT…however after its implementation, people tried to make it into a political kind of football,” the Head of State said.
He added that while this was the case, he thought it best to have a comprehensive study done on VAT, to determine if the rates are too high.
It was introduced as part of government’s plan to modernise and streamline the taxation system and to accomplish the following: broaden the tax base, thereby spreading the burden of taxation more equitably; and establish a fair system because it affects the broadest range of taxpayers so as to ensure more of the people who benefit from public services also contribute to paying for them. (GINA)