By Devina Samaroo
Minister within the Ministry of Finance, Jaipaul Sharma said the heavily criticised tax measures introduced this year was an effort to correct the “unfair and inequitable” tax system inherited from the previous administration.
“In 2017, in an effort to broaden the tax base by capturing activities and individuals excluded from the tax base, reduce tax rates, enhance the method used for exemptions, a number of fiscal measures were undertaken by the government,” he told business executives during the final day of the IDB-funded Business Summit hosted at the Marriott Hotel.
Some of the measures introduced in the 2017 Budget are the VAT on private education and school supplies; VAT on some aspects of private healthcare; VAT on water and electricity; VAT on construction materials locally produced; VAT on agricultural, mining and heavy duty equipment; VAT on domestic flights; among others.
There was also an increase in a wide range of fees including gun licenses, driver licenses, and passport application fees, among others. But, according to Sharma, the previous tax system saw only 20% of large businesses in the country accounting for 80% of revenue collection.
“We inherited an inefficient inequitable tax system characterized by high tax rates and heavy tax burdens, widespread tax evasion and tax avoidance, abuse of tax exemptions and misuse of fiscal incentives accounted for biggest loss of revenues for government,” Sharma argued.
With consultations ongoing for next year’s budget, however, the minister said the 2017 tax policies will be reviewed and accordingly adjusted based on the recommendations and feedback from stakeholders.
Minister of Finance, Winston Jordan during a recent press conference promised that there will be no new taxes for budget 2018. However, Opposition Chief Whip Gail Teixeira told the Business Summit that the comments by the minister are not very reassuring.
“This is not quite reassuring because does that mean that the situation remains status quo, that the 200 tax measures that have impacted heavily on the private sector and the ordinary people of this country, will that remain?” she expressed.
Teixeira used her opportunity at the forum to present to the business executives the PPP sponsored motion calling for the government to implement a number of recommendations to stimulate the economy and reduce poverty and hardships.
The inaugural business summit, a two-day event, is aimed at facilitating discussions among stakeholders with the intention of finding workable solutions to real problems. However, today’s event had a poor turnout with just under 60 participants which is in stark contrast to the packed room during the morning session of yesterday’s programme.
