More jobs, less VAT for some Grenadians
Prime Minister Thomas says his administration will not only give what was promised, but more.
ST GEORGE’S, Grenada, Wednesday September 8, 2010 – The creation of thousands of jobs and the reduction of the Value Added Tax (VAT) for some sectors are part of a stimulus package that was unveiled by Grenada’s Prime Minister Tillman Thomas last night.
“We have heard your calls for jobs and increased economic opportunities; to save your businesses and preserve jobs; to stimulate the economy and increase the level of economic activity; to provide more and better support for our small and medium sized enterprises, especially in the areas of construction and agri-business; and to improve social safety nets and reduce the cost of living,” he said in an address to the nation before going on to announce the new measures.
“Tourism will also benefit from VAT reductions”
Thomas said that after several days of evaluating the country’s economic situation, the government has decided to create short-term employment opportunities and work to keep other jobs secure.
Through the issuing of 175 contracts in a road maintenance programme, over 2,600 people will get work; 240 more will be employed in an expanded farm labour support programme; and 450 more will get jobs as a result of the implementation of key public sector projects.
“Government is committed to working with the private sector to help them to survive and preserve jobs,” the Prime Minister said. ‘To this end, Government will continue to work with existing Private Sector firms, including small and medium-sized enterprises to ensure their survival and the preservation of existing jobs.”
He also announced a reduction in VAT for the construction industry.
Government had previously announced it would effect a 25 percent reduction in the tax on selected construction inputs, from April this year, for a period of six months. However, that did not materialize.
Now, Prime Minister Thomas says his administration will not only give what was promised, but more.
VAT will be cut in half on steel, cement, roofing and lumber for six months, beginning October 1st; terminal dues at the Grenada Ports Authority will also be slashed by 50 percent on the importation of sand, with immediate effect, with consumers benefitting from the reduction; sand depots will be created in critical locations around the country to reduce transportation costs for construction works from next year; and there will be a simplification of the tendering process to shorten the time for approval of contracts.
Tourism will also benefit from VAT reductions.
“Under tourism, we will implement the removal of VAT on service charge for hotels on condition that no less than 90 percent of this service charge is paid to workers…(and) the grant of a 50 percent rebate in the VAT on hotel occupancy only for the months of September, October and November,” Thomas said.
The Grenadian leader said his government is also taking steps to reduce the cost of living.
VAT has removed from textbooks and there will be a Duty Free Barrels programme for the months of November and December.
According to Thomas, automobile dealers will also cash in on the new measures.
“When VAT was introduced, it was our stated intention to avoid any major increase in the cost of vehicles because of VAT. Indeed, we reduced the excise tax from 40 percent to 35 percent to achieve this. Unfortunately, this adjustment has not been sufficient and so the cost of commercial vehicles rose significantly,” he said.
“Therefore, we will remedy this situation and support the industry to retain jobs. In this regard, we will remove the excise tax on the importation of commercial vehicles to ensure that the impact of the VAT is revenue neutral. VAT will continue to be charged on these vehicles in the normal manner.”
During his address, Thomas also called on the banking community to play a more active role as corporate citizens by offering special financing packages to assist in stimulating economic activity and providing relief. (Caribbean 360)