CATEGORY:PRESS RELEASE(GOVERNMENT) -------------------------------------- INSIDE GRENADA SATURDAY May 12,2007 St. George’s: In response to recent statements made relative to the present wage and salary negotiations with the Government of Grenada, the Ministry of Finance would like to clarify the following: • The official figures that are being used by the IMF for the cost of living in Grenada for the period 2004-2006 are as follows: 2004: 2.3% 2005: 3.5% 2006: 3.8%. Moreover, according to the Statistics Department of the Ministry of Finance, inflation, as measured by the Consumer Price Index (CPI) is projected at 2.4% in 2007 and 2.0% in 2008. • With regards to the National Reconstruction Levy, the Ministry would like to inform the general public that this measure, implemented in January 2006 on incomes in excess of EC$1,000 per month, represented part of the effort of the Grenadian people to contribute to the rebuilding of our country following its destruction by hurricanes Ivan and Emily. The general public is informed that the levy is temporary as it has been approved by Parliament to be implemented for a period of 3-5 years. • On the issue of the Value Added Tax, the public is hereby informed that VAT will replace three existing taxes; namely the general consumption tax, the motor vehicle purchase tax and the airline ticket tax. Our preliminary calculations indicate that the implementation of VAT should lead to a reduction in the prices of certain goods.