Wednesday, April 25, 2012

Councillors to be sworn in on Friday

      With the new Constituency Councils Act just having gone through its first reading, Lorne has nominated his people to form (in my mind) an interim Council while the Act must pass through all the other stages before being on the legislative books.
Bravo, to Mr Rep! He has taken the bold step to make for the first time a resident of Saltibus to head the Choiseul Village Council. History in the making? 
   Yes. Mr H. Cooman, the principal of the Saltibus Primary School has been given the task to lead the other eight Councillors. History is also being made as well, because Imogene Mithel who is the deputy chairperson is the only living Councillor to have served for nine years and is being recycled. Bravo, Mr Rep. (a little pay back?)More history in the making – for the first time a resident of Rivere Doree has been appointed to serve on Council. ( Lorne seemed destined to only create history)
    Why Oliver Sampson? The guy has admitted that he is not well, plus the man is aging. What is wrong to have nominated Dean Charles in his stead? Is there a cut to be had while in Council, through project implementation and assessment? Let not history repeat itself.
    The other Councillors on the team I know have what it takes to make some meaningful contribution during their tenure. (February 1,2012  -  January 31, 2013). Of course, in an earlier blog post, two or three of the persons on the team were recommended by me to be Councillors.
   What however is significantly lacking is a nominee to foresee the needs of the western part of the constituency. Is it a deliberate ply by the rep to punish these people? Whereas , he saw the need to nominate three persons from La Fargue, (which to my mind is excessive) could he not be myopic and see the need for someone on the Mongouge/Delcer side to be on his Council? Maybe he was handed these names by…………. (Your guess is as good as mine)
    The construct of the Council has gotten a 75% approval from this blog. Let’s hope that until the new Constituency Councils Act come into being, where a more balanced and wide cross-section of the constituency will be represented, these Councillors will do their utmost best to make Lorne proud.
   The swearing-in ceremony this blog has been reliably informed is due to take place on Friday this week. The full slate of Councillors to be sworn-in are: Mr H. Cooman  -  Chairman, Mrs Imogene Mitchel   -  Deputy Chairperson, Mr John Mathurin, Ms Tania Alias, Mrs Maura Minvielle, Ms Gail Charles, Ms Eve Amiable,  Mr Kieth Mortley and Mr Oliver Sampson 

Note: Google "Math  wizard". It's a blog designed for grade 7 of primary schools around the constituency

Tuesday, April 24, 2012

New Financial Complex Under Construction

   Scores of skilled and unemployed nationals have and will continue to receive employment opportunities on the multi million construction of a Financial Centre at Pointe Seraphine.
In addition, the state-of the-art facility will save government millions in annual rental fees, as the various departments in the Ministry of Finance and Economic Affairs will be in one central location.
Speaking Tuesday April 10, 2012 at the project sod turning ceremony Prime Minister and Minister for Finance Honourable Dr Kenny Anthony said the project which was started by the previous administration will result in greater efficiency in government.
“The honour for this investment properly belongs to the former Government of Saint Lucia and more importantly former Prime Minister Stephonson King. Currently the government pays $33.5 million in rental cost per annum and that is a phenomenal amount of money, and the principle difficulty with that arrangement is the tendency for government offices to be fragmented and located in various locations resulting in little control of day to day activities. When all departments are located in one area I am certain it will be far better to achieve accountability and allow for efficiencies to prevail in the operations of the Government of Saint Lucia”. Dr. Anthony said.
The six storey financial centre on 64,000 square feet of land is expected to be complete in 22 months under the Built Operate Lease Transfer or BOLT arrangement financed by the National Insurance Corporation.
NIC Director Mr Mathew Mathurin said the project is a significant investment in the country at this time of global economic uncertainty.
“This project is not merely an investment for the National Insurance Corporation it is just as important a contribution towards national development-the project provides the dual benefit of generating economic activity as well as being a safe addition to the investment portfolio of the NIC,” Mr. Mathurin said.
The Financial Centre is touted to be the greenest office building in St Lucia, informed by the guidelines of the US Green Building Council. It is being constructed by NH International Caribbean Ltd.

Monday, April 23, 2012

VAT in StLucia mixed with low-skill jobs and low wages is a stalled Castries economy

 By Melanius Alphonse

    September 1st, 2012 and Saint Lucia is scheduled to be shackled to the core by the economic witches of two political parties.
One on the right and the other on the left, both trapped with incomplete reasoning, non–existent visions and ill-defined long-term solutions.
   Indeed, the conservative right played mass, and shadow-boxed their way out, but the left wing liberal government will have to do the dance.
The economy continues to be weak, demand for goods and service has been slow to recover, and household wealth continues to decline. Continued high unemployment is the new norm, while government spending has been unchecked in a bureaucratic haze.
After so many wrangles in opposition and on the campaign trail, apparently commonsense economic theory is so alien to the chief policy makers that high unemployment will persist.
   Contrast this with poor economic conditions, a VAT, low skill jobs, low wages and deflated consumer spending to the painting of a rosy picture of proposed robust job growth and the absence of a well thought-out blueprint for growth to better days.
How real can this be?
  Oh yes, the economy is in retreat losing jobs faster than it can create? True or false – eh rouge, eh rouge.
  Saint Lucia can no longer accept cumbersome drags on the economy, such as high corporate tax, none visionary leadership to alternative energy, technology, research and development (R&D), access to investment funding and policy guidelines that would propel the economy to spark growth and employment.
  In a nutshell the economic recovery is poised to remain anemic and would be unable to break the witches spell with a VAT that is mixed with low job skills and low wages.
What’s more: up to this point, VAT represents an attempt by those producing largely confusing explanations and interpretations of what they themselves have not yet fully understood.
This quantum leap to VAT has failed to manifest the baby steps that are required before the implementation and must now match rhetoric to deliver on the blueprint to growth in light of the VAT.
Under this scenario, VAT is a no-win proposition without rationalization of both personal and corporate income tax yields.
  It must replace other forms of taxations and facilitate a reduction in other taxes.
In its present form, a VAT will further slow economic growth and destroy jobs on the bases of production between pre-tax income and post tax consumption.
With the capacity of a VAT to generate large amounts of tax revenue, like the gas tax, a liberal government would easily expand the size and offer new ways to finance bigger government – and not necessarily smarter government.
  This has already begun with the formation of new committees, consultants and advisors.
With VAT implementation, small business will have to painfully consider compliance costs, (act as a tax collector for the government), and keep it well below 2 percent of sales.
Or they may be forced into the underground economy or resort to barter.
Taking a VAT out of consumers’ pockets in the medium- to low-income brackets would reduce private savings and alter patterns of consumer spending, as well as personal investment options.

  Once more – there is a need to streamline and prioritize the development model.
When VAT is enforced – a decline in real wages would be noticed leading to reduced spending power on consumption and luxury items.
As a consequence, sectors such as construction, new vehicle purchase, tourism (hotel, restaurant and bars) face uncertainties in an economy characterized by high unemployment, with stifled and constrained demand.
  A VAT, low skill jobs and low wages will not grow business and speed up economic recovery to get Saint Lucia back on track.
  At this time, with the current economic outlook, a VAT would hurt the economy, kill jobs, grow the size of a liberal government, push small business in the underground economy and permanently reduce family’s wealth and incomes.
  The gap between theory and reality is a live spectacle, playing out free of charge in Europe – no consultant or advisors are required.
  Therefore, if it is not suitable and sustainable for Europe, why take their advice and mimic them.

Thursday, April 19, 2012

Fw: Champion Fm

Hey, after a while off the air waves Champion Fm is back on. This time rootzer than ever with a little touch of old soca.
You know Champion is untouched when it comes to vintage of any kind..
Tune to 106.1 fm on Mondays for the usual "MONDAY NITE COUNTRY"
New programing to come soon.
So spread the word CHAMPION FM IS BACK..
And remember there is less blah blah here and more music.
Dedan C. G. Baptiste

Saturday, April 14, 2012

The Advantages of VAT to Government

American [St. Lucian] politicians will sometimes discuss the possibility of implementing a value-added tax, or VAT. A VAT system has some similarities to a sales tax but with a few key differences. More than 130 countries, including all the members of the European Union as well as countries such as Japan and Brazil, have instituted a VAT system. Among other advantages, the VAT system encourages tax payment and makes tax collection easier for governments.


  • A VAT is a consumption tax, which means the government collects a tax whenever a purchase takes place. This is similar to state and local sales taxes. However, only the final consumer pays a sales tax while the government collects VAT money at every stage of production. Each link in a chain of sales pays the same rate and reports the total paid to the next link. Unlike the state sales taxes found in the United States, most VAT systems are set by the national government and apply to all citizens equally.

VAT Example

  • Imagine a factory in a country with a 20 percent VAT. The factory makes a steel bar and sells it to a car parts manufacturer for $100, the factory pays the government $20 for the VAT and reports that amount to the car parts manufacturer. The car parts manufacturer turns it into a car door and sells it to a carmaker for $200. While 20 percent of $200 is $40, the factory already has paid $20, so the car parts manufacturer would deduct that amount and only pay $20. The VAT rate is the same for every entity, but they only pay tax on the additional value of the good they sell, hence the name "value-added tax." The total VAT paid on the car door is $40, but it has been paid by more than one entity.

Promotes Compliance

  • Governments find VATs valuable because the multiple steps encourage payment. If the factory tried to avoid paying the VAT, the car parts manufacturer would not be able to deduct the factory's payment from the amount the parts maker has to pay. The paper trail from company to company also allows governments to track nonpayment easier. Finally, even if one link neglects to pay the tax, the government can still collect from all the other links in the chain, reducing the cost of nonpayment for the government.

Tax Harmonization

  • According to "The Economist," all 30 members of the Organization of Economic Cooperation and Development (OECD), which is primarily composed of wealthy European and Asian states, use a VAT system except for the United States. The members of the European Union switched to a VAT system largely to ensure every member paid taxes equally and fairly. The similar tax structure also makes it cheaper for governments to collect the tax because all other governments have the same system. According to "The Economist," this would also be true for individual states in the United States; if the federal government instituted a VAT, then many states would both save money and collect more if they harmonized their taxes with the federal VAT.


Thursday, April 12, 2012

Disadvantages of VAT

The main disadvantages which have been identified in connection with the Value Added Tax are:

1) VAT is regressive
It is claimed that the tax is regressive, ie its burden falls disproportionately on the poor since the poor are likely to spend more of their income than the relatively rich person. There is merit in this argument, particularly if it attempts to replace direct or indirect taxes with steep, progressive rates. However, observation from around the world and even Guyana has shown that steep tax rates lead to evasion, and in the case of income tax act as a disincentive to effort.

Further, there is now a tendency in most countries to reduce this progressivity of taxes as has been done in Guyana where a flat rate of income tax has been introduced. In any case VAT recognises and makes room for progressivity by applying no or low rates of tax on essential items such as food, clothes and medicine. In addition it allows for steep rates of tax on luxury items, although this can create problems for administration and open opportunities for evasion by way of deliberate misclassification, a problem incidentally not peculiar to VAT, and which takes place extensively in the area of customs duties.

2) VAT is too difficult to operate from the position of both the administration and business.

(a) The administration
It is often argued that VAT places a special burden on tax administration. However, it is worth noting that wherever VAT was introduced one of its effects was the rationalisation and simplification of the previous indirect tax system and its administration. Each of the previous indirect taxes such as customs duties, purchase tax and excise duties replaced by VAT had its own rate structure as well as a different tax base and separate administrative procedure. The consolidation and incorporation of numerous indirect taxes into the VAT would simplify the rate structure, tax base, and administration of the indirect tax system, thereby eliminating the overlapping auditing practices that had plagued those systems.

In addition, the abolition of a number of alternative indirect taxes releases experienced personnel to focus on a single tax. It also means reduction in the number of forms used, legislation to be applied and returns and accounts with which the business person has to contend.

(b) Business
It is true that the VAT is collected from a larger number of firms than under any form of income tax or single state sales tax; to the typical smaller firms the complexities of the tax and the need for more extensive records (for example, to justify deductions) are likely to prove serious.

However, it is often overlooked that businesses already function with considerable administrative responsibility for a number of laws including the National Insurance Act and the Income Tax Act.

Under the Income Tax (Accounts and Records) Regulations of 1980 every person, without exception is required to maintain detailed and extensive records of all its transactions. Compliance with this will certainly ensure compliance with VAT regulations, and since there is an actual benefit to be derived from accounting for VAT paid on input there is an incentive for proper record-keeping.

As we have noted before, VAT also allows for the exemption of small businesses from the system.

Under any form of sales taxation, small businesses have to be granted special treatment because of their inability to cope with the requirements of keeping adequate records which larger enterprises can handle at a reasonable cost. The intent of the special treatment is to reduce the administrative burden on small enterprises, but not the taxes that normally would be charged on the goods and services they supply. The revenue loss at the final link in the commercial cycle is limited only to the value added at that stage ,whereas in the case of income tax or sales tax the entire tax is lost. To recover the loss from exemptions, a flat tax on turnover may be applied.

In the larger businesses with proper staff and computers, the task is really one of double entry book-keeping and any additional work is hardly ever noticed.

3. VAT is inflationary
Some businessmen seize almost any opportunity to raise prices, and the introduction of VAT certainly offers such an opportunity. However, temporary price controls, a careful setting of the rate of VAT and the significance of the taxes they replace should generally ensure that there is no increase if any in the cost of living. To the extent that they lead to a reduction in income tax, any price increases may be offset by increases in take-home pay.

In any case, any price consequence is one time only and prices should stabilise thereafter.

4. VAT favours the capital intensive firm
It is also argued that VAT places a heavy direct impact of tax on the labour-intensive firm compared to the capital- intensive competitor, since the ratio of value added to selling price is greater for the former. This is a real problem for labour-intensive economies and industries.


Monday, April 09, 2012

The Credit Union Prospers under Fontenard

Without a shadow of a doubt the Choiseul Cooperative Credit Union has been growing financially since the appointment of Silvanus Fontenard to the post of general manager. This growth has been due to the explosive and aggressive bargaining strategy of the GM.
According to the last AGM financial statements deposits moved up by 19% and fixed deposits by 40%. Speaking on behalf of the Board of Directors the president said, "It is clear therefore that in spite of the economic meltdown which is currectly affecting the global financial market our members are deeping their faith in our credit union."
The Soufriere Branch netted over $2m in savings during the last financial year.
Permanent shares stand at $832,000 while members deposits are just nearing $4m, members regular savings are at about $26m.
Almost 2000 members had to be disqualified from the union because they did not meet the criteria to be a member. This new criteria mandates that to be a member one must have at least 20 permanent shares at $5 per share. According to the manager these members had less than $100 and some of them had just cents on their accounts in the union.
Loans totalling appoximately $16m was approved with vehicle purchases amounting to $2.5m, project loans in second place with $2.2m and home improvement $1.4m in third position.
Delinquency which has been a sore point for the union has been reduced from $4.5m to $2.8m
The credit union's net surplus for the year was $1.3m almost $400,000.00 less than the previous financial year. This drop in the net surplus may have been due to the increase in operating expenses.
Lawrence Constantine's tenure has ended on the credit committee and he is being replaced by Elmira Joseph.
Dedan C. G. Baptiste

Tuesday, April 03, 2012


It has always fascinated me as to the origin/s of a rumour or an allegation. For the past three weeks the St. Lucian public have been bombarded with two seeming political deals. The media coins them as allegations.
Just recently the Parliamentary Rep for Anse La Raye/Canaries was criticized for allegedly  cutting a deal with the PM in exchange for a year round “STEP” program for his constituents. The deal it is alleged was  that he would not be given a Ministry in exchange for STEP throughout the year in his constituency. True or false?
Pep, the rep in question, quickly took to the media to refute these allegations. His explanation is that the people of his constituency have been promised this package because it was in his Party’s manifesto of 2006. This he said was just fulfilling the promise this time around. Believe it? Cabinet has sworn to secrecy that whatever is said or done in chambers stay there. So I guess we will never know the whole scenario.
Prior to Pep’s alleged deal, Rufus was also in the news.  It was reported that he  is alleged of cutting a deal or arrangement with the PM over getting favours for a diplomatic passport, and in return he Rufus would not challenge  the results of the Choiseul/Saltibus seat. The seat was won by Lorne with a margin of 95 votes. Two more seats are also being challenged by the UWP: Gros Islet and Babonneau where the margins of victory by the SLP candidates are 2 and 7 votes respectively.
Rufus’ alleged deal has pissed off UWP supporters islandwide. According to the statistics, if Rufus had accepted to challenge the results and the court ruled in UWP’s favour,r the UWP would form the government. But with Rufus withdrawing his challenge all hopes of this victory is lost.
But the question remains. Did Rufus really go for this deal? DBS reported that Rufus neither confirmed nor denied these allegations. Speaking with Rufus he told this blog, that a lead of 95 is too large to challenge and he thinks that it would be an exercise in futility to take this route. He also confirmed with this blog that he is “done with elective politics.”  A sense of betrayal by the people of the constituency was being sensed throughout the discussion with him.
   But Rufus’ critics won’t let him off so easily. One supporter who vehemently disagrees with his excuse  told this blog, “I will never put anything pass this man. Remember how he was willing to throw down his government just to get back into cabinet? For what? Just to get a pension. Dat man for himself and himself alone. Trust me Dedan and you will see it.”
Whether I believe that he is for himself and he alone, is still swirling in my head. I do have my own reservations about the man, not even taking into considerations the numerous allegations that are flying around left right and centre.
A strong supporter of Rufus also commented on the deal allegation. “What the hell! My daughter was sick with cancer and she asked the Ministry of Education for help and they never gave her any assistance. She eventually died. If de man is sick and he needs help, why not give him the help?”
When the story first broke the PM refused to make an on- camera comment and discarded these comments as rubbish. But earlier this week he gave an on- camera response and denied these allegations. According to him, “I do not know Rufus’ business.”
What is interesting here is no one seems to be chastising the PM for the alleged deal with Rufus but Rufus is being looked at as the Judas of the UWP camp. Actually he was never liked anyway.
These two deals or arrangements or allegations will soon dissipate into thin air and forgotten   as a fleeting illusion, while the people continue to go about their daily lives.