In recent days, Finance Minister Colm Imbert has had the dubious honour of defending the Government against Opposition claims that tax increases are being contemplated to boost revenue.
In response, he has repeatedly sought to discredit these allegations, reiterating his stance in Parliament yesterday, after Opposition Leader Kamla Persad-Bissessar revealed to United National Congress supporters, details of a Cabinet Note containing tax proposals for consideration, including a suggested increase in the Value Added Tax (VAT) to 15 per cent to generate an extra $1.4 billion annually for the Government.
While not disputing the validity of the document shared by Mrs Persad-Bissessar, the Finance Minister noted in the Senate yesterday that it has been customary for ministers of finance to receive such reports from ministry officials over the last 30 years.
The purpose of the document, he said, was to present the Cabinet with an overview of the financial consequences associated with potential tax changes.
Among the taxes listed for consideration in this particular Cabinet Note were VAT, Income Tax, Corporation Tax, and the Business Levy. A new Drug Application Fee was also detailed in the document.
Nonetheless, Mr Imbert stressed that no decision had been made regarding the contents of the document while dismissing the Opposition Leader’s claim of pending increased taxation as “a foolish and ridiculous false accusation.”
Indeed, until Persad-Bissessar can provide evidence that the Cabinet approved any tax increase, her claims remain merely allegations.
At this stage, all we know for sure is that these detailed proposals were presented to the Cabinet in May of this year.
However, given the current political climate leading up to an expected general election, it is crucial that the Government makes its position on increased taxation as clear as possible.
To say that no decision has been taken on the matter is not the same as saying that the proposed measures have been dismissed out of hand and will not be considered anytime soon.
Senior members of the Keith Rowley administration ought to know by now that public sentiment has not consistently favoured the Government, especially given the vagueness in their denunciation of recent accusations.
The matter of CDAP spending is a clear case in point.
After Imbert publicly raised concerns about the high CDAP bill at a recent Standing Finance Committee session of Parliament, he then accused the media, which quoted him verbatim, of spreading misinformation about possible cutbacks.
Days later, Prime Minister Rowley suggested that cutbacks could be considered. Speaking in Parliament on Friday, the Prime Minister reflected on the substantial growth of the programme’s budget from $35 million to close to $400 million per year before asking, “so what” if the Government chose to cut back spending to around $200 million?
As the nation approaches a crucial general election period, improved communication from the Government would be advantageous for all concerned.
We have made it clear in this space many times before that the Government’s credibility gap is closely linked to its improper communications strategy.
To eliminate any ambiguity, it must clearly communicate that tax hikes are not included in its immediate agenda, particularly with the public being told that the Government is facing a revenue shortfall this year. Merely stating that a decision has not been made does not definitively rule out the possibility.