The Minister in charge of the tax review is Jose Coye and he's also the man behind the GST tax. The GST Bill will go to the House of Representatives for it's first reading tomorrow and today when he convened a press conference to speak on transport matters, we asked Coye to comment on what might be in the GST. He was intentionally oblique, but did say what were the primary political considerations.
Hon. Jose Coye,
"What I would expect indeed is that the concerns will be centered around the rate, the exemptions, more or less the threshold."
Jules Vasquez,
So how much is the rate and will light bills be exempted and will the threshold be set at 75,000 to bring it in line with the business tax?
Hon. Jose Coye,
"I think what we need to do first is that we need to put forward a proposal and why I am saying this is because there is an inverse relationship between your rate and your exemptions. The more you want to exempt, the higher the rate will be. So at the end of the day if those who demand certain exemptions, and their voices prevail, then of course you have to adjust a rate. But you make proposals first to say that if you do these exemptions, this is the rate you'll need to charge to be revenue neutral. If that is what at the end of the debate they want, fine that is what it will be. But if the debate proves that we need to make more exemptions then we need to take the rate up. If we lessen the exemptions we bring the rate down and that is what I think will be the main debate. The economics of it is not difficult, it is the politics."
Jules Vasquez,
This implementation of this tax will be made simple by the experience that has been gained from the VAT and in fact the legislation will almost be modeled off the VAT legislation. Would you say that this is the VAT by another name?
Hon. Jose Coye,
"Yes a rose by another name is still a rose Jules. You are right."
Again, Coye would discuss very little on the specific proposal in the bill but out sources say the proposed rate is just under 10%. As for light bills, it is proposed that those with light bills of $150 or less per month would not pay GST on that bill. The bill also proposes that a hotel tax would no longer be charged, instead hotels would charge the GST and the revenue form this would go into the consolidated fund and not the Tourism Board.
