UNC Senator Damien Lyder said the Government’s debt of $7.8 billion in VAT refunds, “is a grave mistake that will harm our regional industry severely.
Speaking at the UNC media briefing on Sunday, Lyder called for the Government’s mid-year review on Wednesday to include a better plan for payment of VAT refunds—beyond paying bonds.
“Paying bonds is no great feat—it’s not sustainable and will add to T&T’s debt problems. And non-payment of refunds is an abuse of business—it’s hurting them.”
Lyder comment follows the news by Finance Minister Colm Imbert, that the VAT refund level owed to businesses was $7.8 billion and $3 billion will be paid in bonds ahead and about $1 billion to $2 billion in cash.
He said the Government’s debt of $7.8 billion in VAT refunds, “is a grave mistake that will harm our regional industry severely. It will exacerbate businesses’ cash flow problems, raise borrowing costs, lower competitiveness, result in job losses, deter investment, and erode confidence in the government among business leaders.
“Altogether, withholding refunds shows the Government isn’t supporting manufacturers’ bid to increase exports,” Lyder added.
Backing the T&T Chamber’s call for a dedicated VAT system, he added, “We don’t know if the cash (Imbert) said is being paid will be $1 billion or $2 billion, but there’ll still be a backlog of about $2.8 billion in refund outstanding.
“So paying some in cash or with bonds is just covering the hole at the top while it gets deeper beneath. There’s still no real system for when people pay VAT, they know refunds will be there to pay for their goods.”
Lyder, who cited the law calling for payment of refunds, noted it also applied to Government’s refund payments. Further, he queried the payment of the one per cent interest on this.
Accusing Imbert of being disingenuous and declaring a Budget surplus while $7.8 billion was owed in VAT refunds, Lyder said he was sure if the refunds had been paid there would have been a bigger Budget deficit.