I will firstly like to give kudos to the ruling administration and minister of Finance for attempting to fulfill an election promise made in the heat of the election campaign. Striving to keep the verbal pact with the people is very good, regardless of whatever side of the political divide you belong to. However, as the implementation of the promise takes effect, it becomes clear that promise was just a promise, without great thought, or policy driving it. Please permit me to explain below.
Less can never result in more. It defies logic as to how you can drop the value of the tax collected and expect to collect more revenue from it, unless you were planning to increase the number of goods that were to be taxed. This was the first hurdle the government faced, as it was forced to review and add tax on items not previously taxed, in order to meet its revenue requirements.
The consequences of it though were dire, as many items previously exempted from VAT, were the essentials. This means that the cost of essential items have now increased by 12.5 per cent, while the cost of luxury items have dropped by 2.5 per cent. Who in the end benefits? The poor who could have never afforded luxuries, now have to dish out more, while the luxuries for those who can afford, cost less. I am sure this was not the intention of the promise made.
No doubt politics is about looking good in the eyes in the public and with your back against the wall, we look for reasons outside the box to explain the decisions made. To justify the price changes, it was postulated by both the Prime Minister and the Health Minister that the changes will encourage people to eat healthier. It sounds great, but regretfully, this is not what has happened in practice.
The prices of previously zero-rated foodstuff purchased in the supermarkets have gone up by 12.5 per cent, but the reduction in VAT means that all the fast food outlets should now have a reduction in their products by 2.5 per cent as prepared food was never exempted by VAT.
And so the lesson, I hope, has been learnt by the government and all politicians–be very careful of the promises you make on the campaign trail because you may find yourself in a lot of trouble if you cannot fulfill the spirit in which it was made. But the lesson must be learnt by the public as well–to not be gullible, but always we must give deep thought into what is being said.
Vedavid Manick,
Sangre Grande