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.