Her Majesty’s Opposition is pleased to note that the Tillman Thomas administration has listened to our advice and will be removing the VAT being levied on service charge in the hotel and restaurant sectors. The Opposition had made it clear to Government that the imposition of the VAT at a time when the economy is in a state of recession was not a very prudent move since doing so will add to the economic hardships of the population, will work against economic recovery and will destroy every sector of society. The current state of the country’s economy has proven us correct.

The VAT on service charge has not only significantly reduced the earnings of the hotel and restaurant workers, but has also made it a much more expensive experience for guests who visit these establishments. In other words, the VAT on service charge has literally reduced Grenada’s competitiveness in the tourism sector.

The VAT, in general, has increased the cost of basic items to the Grenadian public at a time when many persons are losing their jobs on a daily basis and are literally struggling to survive. This, coupled with the loss of tourist visitors, has worked to greatly curtail the spending power of our citizens and has ominously reduced economic activities.

According to Senator Boatswain, “We will continue to call on this administration to ease the burden on the poor and vulnerable and in particular to speedily implement the removal of VAT on building materials and school books.”

While it may be already too late to recover jobs that have been lost in the construction sector - which has declined by over 95% - the Opposition feels that even a few jobs will assist poor families in these terrible times. Parents, who have to purchase many of the school books from book stores under the Government’s failed school books programme, will also experience some financial relief.

From the Office of the Leader of the Opposition