Dear Editor,
Musing on the VAT yielded some sharable ideas on how it could have been played out with imagination, compassion, and foresight.
The GRA could have given the business community three to four months into the year to sell off old stock, while dropping the C-tax in the interim on all items previously taxable in excess of 16 per cent to a new low – for the sake of argument – 15 per cent.
Then, at the end of the ‘transition, or trialability period,’ the GRA could have ushered in VAT at a rate lower than 16 per cent, possibly at 4 to 10 per cent, replete with the exemptions and zero-rated items. The latter would have included items used by pensioners and the sick, and some more protein items to cover the need for protein by the less fortunate. This is to avoid malnutrition among these groups. And the GRA could then have applied a two month ‘stock relief,’ to compensate retailers for the consumption tax paid on unsold items still on hand at the fifth or sixth month. This would be calculated at the adjusted 15 per cent rate, minus the new rate applicable to the item on hand. As of June, or July 1, VAT could have been applied at the new rate determined for the item on hand for all stocks received from that date.
Last Saturday, I was well VATted, and VAT horrified at the supermarkets where the prices sure unilaterally raised, sometimes secretly, above the list price. On one item alone – Tetley peppermint teabags – the price at one supermarket was raised by $90.00 above the December price. And at the other supermarket, the price was secretly adjusted in the computer to reflect an increase of $36 above the December (and still) list price. Then, in both cases, the items became taxable at the VAT rate.
And when I had to buy a curry chicken and a puri in a piece of paper for my dinner I had to accommodate the government in every bite, paying an increase of $40.00 over the December price, and then a VAT of $42.00 on top of this.
As I chewed, it sank deeper and deeper in my psyche. This is crazy. The seller should not have raised the price. They probably did so out of ignorance of the purpose of the VAT and roguishness to do as the other appeared to be doing – “following pattern” as we day in the vernacular. This in itself is a manifestation of alienation.
And then the VAT. This was bizarre. The most the government should tax me for not sharing my small piece of chicken curry and puri with it, if it taxes me at all, is $10.00 – 4 per cent.
This brought into focus the whole concept of taxing processed food purchased in fast food outlets. The managers/cooks had to pay C-tax and/or VAT on the ingredients. They incorporated these taxes and their mark-up on the original cost in their list price. To go back again, and retax the processed item, smacks of double taxation. This artificially explodes the price of the processed item. And given the legacy of the C-tax (already paid) and the intransigence of the majority of the businesses to unilaterally cut prices to reflect C-tax, clearly what you are looking at is a recipe for disaster. You are telling consumers not to buy the processed item, because it has become, all of a sudden – frightfully expensive. Walk with your own food when you go on the street. Such a caveat captor would result in reduced sales in the restaurants, and you know what else.
Clearly, VAT is a stick following consumers. And the particular stick the GRA has been given to implement is a big helluva of a stick – a four by more than four. And boy, isn’t this stick anti-consumption. It clearly communicates this message to consumers.
And clearly, the mismatch of the rate, and the inability of the GRA to foresee and implement the ‘transition period’ affectively caused the chosen stick to swell even bigger, threatening to kill the ‘golden goose’ before the dream of ‘new stock relief’ could be realized.
And the business community with its lackadaisical attitude to the looming disaster, and their inability to point out, in ‘dollars and cents’ the implications of the proposed changes, and seeking refuge in increasing their ‘take’ all contributed to the disaster.
These upper echelons in the government may propose a policy, but it is up to the lower echelons in the hierarchy to point out the implications of the proposed policy. The culture of sycophancy must be rooted out. One cannot expect the President or Cabinet to understand the implications of all policy formulations. The employees in the government must stand up. That is what they are being paid for.
Yours faithfully,
P. Williams
