By: Spokesman Newsroom
BASSETERRE, St. Kitts (Thursday 16th December 2021) — “Can our consumers bear any more high prices?” That was a question posed by Parliamentary Opposition Leader Dr. Denzil Douglas on Wednesday 15th December 2021, in his official response to the 2022 budget presentation by Prime Minister and Minister of Finance Dr. Timothy Harris.
Dr. Douglas argued the view of the opposition side that the increase in Value Added Tax (VAT) “is particularly worrisome because of its potential impact on inflation and the price of goods generally here in St. Kitts and Nevis.”
He pointed to figures from the government’s 2022 budget report: “Value Added Tax on local goods and services would have increased by $9.5 million or 22.58 per cent; import duty by $13.5 million or a whopping 26.25 per cent increase; and Value Added Tax on imported goods by $5.9 million or 10.68 per cent increase. The mammoth increase in Value Added Tax is particularly worrisome because the estimated growth in tax collections is more than 50 per cent higher than the projected growth in the overall economy itself.”
Dr. Douglas cited US inflation pressures: “Even now, the US is facing considerable inflation pressures that are already affecting us. At the end of November, consumers’ prices in the USA had risen by 6.8 per cent for that year, the highest level of increase since 1982. This is a warning to all of us. We must therefore exert great care before implementing policies that could put extra pressure on prices and thereby raise the domestic rate of inflation to levels beyond international rates in 2022.”
The former Finance Minister stated: “I am especially worried because the proposed increase in the collection of Value Added Tax on local goods and services of 22.58 per cent is nearly twice the projected rate of economic growth which is only 11.28 per cent. This could only be achieved by an increase in the rate proposed in respect to Value Added Tax on domestic goods and services.”