Monday, May 19, 2014

The Imposition of VAT on Salt and the Removal of the Subsidy on Sugar are Insufficient

The LPM has come out and chastised the government for not "having enough balls" to go further to increase VAT on alcohol and cigarettes
Below is their argument.
 In reacting to the government’s decision to impose a 15% Value Added Tax (VAT) on sodium and to remove the existing subsidy on su.gar, the Lucian People’s Movement (LPM) opines that it is not at all opposed to these measures as deterrents to the overconsumption of these products.
 However, the LPM also wished that the government had the courage to approve new legislation that would effectively double the VAT on the importation and sale of alcoholic beverages and cigarettes in Saint Lucia. The LPM argues that the consumption of alcohol and cigarettes has not only reduced the life expectancy of most Saint Lucians but has also become one of the leading factors which have transformed the island into a major partying hub which lacks the focus or ability to respond effectively to economic challenges. 
 Moreover, with very little attention paid to underage drinking in Saint Lucia, the future cost of healthcare and juvenile delinquency could reach levels that have never been seen in the history of the country. 
 Notwithstanding the government’s decision to omit alcohol and cigarettes from its list of priorities for stiffer VAT rates, the LPM fully acknowledges that a reduction in sodium intake is likely to lower the number of Saint Lucians who suffer from strokes, acute myocardial infarctions, diabetes and other lifestyle-related diseases. However, the party remains unconvinced that these measures alone, in the absence of a national campaign aimed at educating Saint Lucians on the importance of making healthy lifestyle changes, will amount to much.
 While the mere imposition of VAT on sodium and the removal of the subsidy on sugar will increase government revenue in the medium term, it will have a minimal effect on the government’s long-term desire to reduce its public expenditure on healthcare for fellow Saint Lucians who have developed diseases and other serious illnesses as a direct result of overconsumption of these products.
 A more effective strategy, says the LPM, would have been for the government to go beyond the simple imposition of VAT on only two products that contribute to poor health. Rather, it should have sought to expand the list and embrace a serious national agenda or campaign to raise public awareness regarding the consequences of the overconsumption of these products. 
 The Saint Lucia Labour Party government should have also considered offering a tax relief for food companies which make it a priority to import sugar-free beverages as well as processed food and dairy products with reduced sodium content.
 In addition, the LPM concludes that placing a ban on indoor smoking and urging all restaurants and other food handlers throughout the island to adhere to a voluntary policy of reducing the amount of sodium and sugar that is used in the preparation of local dishes and drinks could have gone a long way towards preserving the health of the people of Saint Lucia.  

NB: cartorns, Mine

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