Economist Richard Peterkin has recalled telling Prime Minister Philip J. Pierre to scrap the country’s 2.5 percent Health & Citizen Security Levy.
“I told the Prime Minister, ‘You know what, just dump it. Get rid of it. Phase it out in this budget, and this was my recommendation,” the retired Chartered Accountant disclosed.
Asked whether he believed the PM would act on his advice, Peterkin answered negatively.
“No. I am a bad advisor,” he chuckled, adding that he was just one person, while Pierre has technocrats and consultants who might decide differently.
“But they also get political advice, and they may say, ‘You know what? This is very unpopular because it’s a nuisance and it’s costly. Let’s find a different way of doing it'”, he stated.
“In doing so, a Prime Minister has to say, ‘I was wrong. I made a mistake and we’ll take it off.’ We don’t do that in this part of the world,” the retired Chartered Accountant declared.
Peterkin spoke Wednesday night during the DBS Television programme Newsmaker Live.
He recommended increasing the value-added tax (VAT) on goods and services to fifteen percent from the current 12.5 percent.
Peterkin observed that the increase would be unpopular, although he acknowledged the need for cash to fund health and security.
Nevertheless, the retired Chartered Accountant described the Health & Citizen Security levy as an administrative headache that increased costs.
The government expects the levy to generate at least XCD 33 million annually to fund law enforcement and public health care.
But Peterkin asserted that the levy rolled out badly.
“Now they want to tax imported services. That’s a new thing. That’s part of the 2.5 levy that’s going to affect like tourism, for example, that would have to pay 2.5 on imported marketing,” Peterkin said.
In this regard, he felt now was a good time to eliminate the levy.
I’m so confused. Is he an accountant or an economist ? I believe he is an accountant. Correct me if I’m wrong
It is most unfortunate that a supposedly professional accountant of decades like Richard Peterkin. would sit on a political TV program and divulge private conversation and advice he had with the Honorable Prime Minister . SAD
Oh ! What have we here ???? Well well well. So you would recommend the VAT to be INCREASED TO 15 PERCENT…… to offset future increased budgetary trajectories….. where the most Honorable KDA had placed it to prevent St Lucia from borrowing from the the likes of IMF loan Sharks pay a little more but we will at least own ourselves. Then we all knew what happened now they complain every day in every way the levy is too high but if it was been paid already the government might not be asking St Lucian’s to contribute for the medical levy because the country would have enough in the coffers to pay for it (maybe)
@The Crow both
Rude this is the public interest. Why should it be a secret?
Since the implementation of VAT, there has been the constant back an forth regarding the right percentage index for such tax. However, despite the political aspirations of both political parties… none of them have addressed the real issue.
VAT was designed so that citizens pay taxes on goods and services rather than having to pay by way of P.A.Y.E which is Pay As You Earn Tax… which today we still pay. The moment government introduced VAT they should have removed the P.A.Y.E or atleast reduce it significantly to alleviate the strain on citizens…
So the real mathematics of the average working individual is…
We pay 10% on every dollar for PAYE TAX
12.5% on every dollar for VAT TAX at the stores etc.
and 5% towards NIC
The percentages are subject to change but the fact of the matter is that we are left with very little purchasing power on every dollar. But no one seems to care about these things. Just a few will see it.
For this Banana republic to become prosperous, it has to relinquish its current economic formula and work in become a duty-free country/zone. Its too deep, sadly other OECS will pay dividends for the St. Lucian economy collapse
Well maybe the gentleman can afford to go overseas for medical care and so to hell with helping the poor people
Simplicity in Humility , thank you. VAT was meant to replace PAYE and they kept both. St. Lucia is the most taxed country in the OECS yet is the worst in all public services. Roads, healthcare, education, security. Everything is dysfunctional here. Where are all those tax receipts going? And didn’t Pierre just forgive 780 million in tax penalties. If the coffers are so empty and they need to add a levy why throw away these amounts?
Dump it !
Dump Peterkin’s suggestion. Dump it.
Politicians are usually reluctant to admit that they are wrong.
To be a professional “accountant”, one must also be a professional ‘economist” (@The Crow). i once asked a friend (a professional economist) if our PM was one or the other, and his response was an emphatic: “Neither!” His response sent shivers down my spine.
And here is Mr Peterkin, spewing almost the same convo I had with my economist friend. i am positive all the lay economists/accountants here in St Lucia KNOW everything there is to know about where and how we stand concerning VAT and PAYE (@Simplicity in Humidity).
You see … we are NOT stupid!!
Well, for what it’s worth, an accountant advising on macroeconomics.