THE EDITOR: I raise a serious issue that is currently of grave concern to my constituents within the business community of Chaguanas West, namely the negligence of the Government in paying businesses their VAT refunds.
As readers will no doubt be aware, Chaguanas is a centre of major commercial and economic activity. In fact, Chaguanas can make a compelling argument for being considered the economic capital of TT.
The vast majority of this economic activity is the result of a wide variety of commercial enterprises, ranging from small to medium-sized businesses to region-wide conglomerates. The one thing these businesses, which employ thousands of people, all have in common is the hostile economic environment they find themselves in, thanks to the short-sightedness and incompetence of the Rowley-led Government.
According to the latest estimates from the Ministry of Finance, the Government currently owes $7.8 billion to businesses in outstanding VAT refunds. It is worth stating that these monies are not special favours businesses are asking for; rather, VAT refunds are monies rightfully owed by businesses.
Another important fact that cannot be stressed enough is that all businesses depend on their VAT refunds to maintain their cash flow. In essence, whether you are running a cafe, a grocery store, a software firm, or a multinational conglomerate, VAT refunds are the lifeblood of your day-to-day business operations.
By continuing to treat the non-payment of VAT refunds in the same lethargic, arrogant and condescending manner as it does with all national issues, the Government is effectively cutting off the blood supply businesses need to stay alive, thereby jeopardising the livelihoods of thousands of families.
In the Government's Mid-Year Review earlier this year, Minister of Finance Colm Imbert patted himself on the back for announcing plans to pay off $3 billion of this outstanding VAT refund debt by way of VAT bonds, which is the same as saying Imbert patted himself on the back for saying the Government plans on taking out a loan to pay this debt. I leave the debate on the legality of this proposal alone for the time being.
Back in May, Imbert promised that these VAT bonds would be distributed between July and August. Predictably, two months later, at almost the end of July, little has been told to the public as to when these bonds will be ready and to whom they will be dispersed.
Furthermore, Imbert also promised to provide cash allocations to the Board of Inland Revenue (BIR) to liquidate a substantial amount of these VAT refunds, yet there is no indication if this has indeed been done.
This fiasco surrounding the non-payment of VAT refunds is only one facet of the much larger problem of how government mismanagement and negligence are adversely affecting the national economic environment. According to the latest World Bank data, TT is languishing at the lowly rank of 105 out of 190 nations in its "ease of doing business index."
This Government's implementation of nuisance taxes such as it
