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7/24/2010 Over six days (July 17- 21), the Meteorological Office at the Robert Llewellyn Bradshaw International Airport recorded 7.45 inches of rainfall and estimated that more than 10 inches fell in the mountains of St. Kitts, with more than 5 inches falling on Tuesday alone. These rains formed part of a tropical depression which caused flooding and lightning damages in certain areas of the island. There were damages to buildings and infrastructure reported in Basseterre (at the ferry terminal), Old Road (Station Street), St. Paul and Christ Church as a result of storm activities. St. Kitts and Nevis are continually prone to natural calamities like these. Each year we watch with bated breath as the parade of tropical storms and hurricanes move across the Atlantic and threaten us with wind, rain and lightning damages that can cost us in the billions to repair. It is always advisable that property owners take precautionary measures to mitigate the risks of damages, where possible, and that the appropriate types of insurance policies are bought to cover damages so that repairs do not set back households in their quests to achieve dreams and maintain their asset base. The reality is that this advice which is given freely to households is also most prudent for governments and most worthy of emulation by governments which seek to secure sustainable growth and economic progress. There is a storm raging at present in the economic sphere. It has the potential to flood the homes of homes on the poverty level and to wash dreams of social and economic advancement away. It has the additional potential to eat away at the foundations for social development like education, healthcare and other services the state has been providing for the citizens of this nation. It is therefore prudent that the government of St. Kitts and Nevis seeks to weather this economic storm by shoring up the fiscal and monetary policies of the state. It is prudent that government realises that as the costs of providing key services continue to rise, government needs to implement key reforms needed to ensure that the state is best prepared to fulfil its mandate. Many nations great and small are at present seeking to restructure their finances as they ride out the pressures associated with this economic storm. Some have sought debt financing and refinancing, while others have sought to increase the tax burden on the people. Here in St. Kitts and Nevis, the Federal Government has proposed to introduce a 17% rate of VAT (Value-Added Tax) to widen the tax base, yet reducing the rate of tax from the 22.5% of Consumption Tax as is currently being charged. The government has also foreseen that it is as a result of increased consumption that economic activity is expected to rise and productivity will help to build a stronger and more vibrant economy. As a result of anticipated growth the government will be better able to maintain schools and hospitals, bridges and roads, and pay civil servants and retirees, while at the same time servicing the debt obligations of the nation. Government, under VAT, will be offering tax incentives to all business that are VAT registered. This is so because VAT paid will be reimbursed to businesses, thus lowering the costs of producing goods and providing services. The storms of life are ever with us and government must be prudent enough to realise that today’s situations demand more focused and results oriented planning and execution of policies. The VAT offers this to us. It is worthy to note that there is fundamentally nothing wrong with VAT implementation. With all the changes of governments in the region there has been no talk of VAT repeals and the only other island not to have implemented the VAT, St. Lucia, is now setting plans in motion to implement it. There is no other political party in the Federation that is creditably opposed to VAT in principle. While they seek to pontificate over time of implementation and the rate of VAT on certain goods and services, there is no record or voice on record that opposes the implementation of the VAT. One group argues both sides of the VAT with one sect saying, on the airwaves, that there would have been no VAT if their party had won the elections with a voice of contradiction emanating from the leadership saying yes to VAT but there would have been no VAT on food items. VAT however is a real and important economic issue for our consideration and best implementation and not a political football to be kicked around on the field of play, to show off the debating skills of politicians. There are real bread and butter issues at stake which leaders of the OECS Economic Union have all regarded as pertinent to the continued development of these islands. This is simply because the VAT will do as its name suggests, Add Value. It is advisable that we each seek to educate ourselves on the benefits of VAT for our nation. Let us each discover how much better fortified our fiscal standing would be, because the reality is just as there are other tropical depressions and hurricanes now unseen on the horizon, so too are there economic storms unseen ahead which we need to be better prepared to face. |
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