Finance Minister Winston Jordan is reported in the media to have said that a review will be commissioned by the IMF before any reduction of Value Added Tax (VAT) could be entertained.
I found this statement puzzling, especially in light of the APNU+AFC Manifesto promise to reduce VAT and the recommendations by a technical committee established by this administration to reduce the VAT. Is it the case that the government is now backpedalling on its manifesto promise in relation to VAT? Is the government now saying that it has reservations about the recommendations made by the technical committee it had set up to review the VAT?
Why would the administration want to have a second opinion on the recommendations made for a two per cent reduction in VAT which in my view seems more than reasonable?
I may stand to be corrected but my understanding is that we have as a country long exited the IMF programme. Besides, experience has shown that the IMF is not known to provide the best technical advice on matters of providing a people-oriented solution to problems facing the economy.
I think the administration should immediately put in place the necessary mechanisms to reduce VAT by a minimum of two per cent in the 2017 Budget Estimates, regardless of what the IMF ‘paper doctors’ may recommend.