The In­ter­na­tion­al Mon­e­tary Fund (IMF) Tues­day said that the au­thor­i­ties in the Dutch-speak­ing Caribbean Com­mu­ni­ty (CARI­COM) coun­try of Suri­name were not “suf­fi­cient­ly pre­pared to ef­fec­tive­ly im­ple­ment and ad­min­is­ter” the Val­ue Added Tax (VAT) in Jan­u­ary last year.

The Wash­ing­ton-based fi­nan­cial in­sti­tu­tion said that at the re­quest of the Di­rec­torate of Tax­es and Cus­toms in Suri­name, a tech­ni­cal as­sis­tance mis­sion eval­u­at­ed how the au­thor­i­ties launched the VAT, ad­min­is­tered the tax in the first 12-months of op­er­a­tion, and pro­vid­ed ad­vice on im­prov­ing the ef­fi­cien­cy of the ad­min­is­tra­tion of VAT.

It said that Suri­name im­ple­ment­ed a VAT on Jan­u­ary 1, 2023, re­plac­ing the Sales Tax

Ac­cord­ing to the IMF, VAT rev­enue col­lect­ed for the first 12 months was ap­prox­i­mate­ly three per cent of Gross Do­mes­tic Prod­uct (GDP) and was 95.4 per cent of the col­lec­tion tar­get.

“The weak­er than ex­pect­ed VAT per­for­mance can be at­trib­uted to how the VAT im­ple­men­ta­tion was man­aged. The au­thor­i­ties were not suf­fi­cient­ly pre­pared to ef­fec­tive­ly im­ple­ment and ad­min­is­ter the VAT”.

The IMF said that sev­er­al risks have been iden­ti­fied, and if not ur­gent­ly ad­dressed, “there may be weak­er VAT rev­enue col­lec­tion, con­tin­ued weak fil­ing and pay­ment com­pli­ance, which pose a chal­lenge to the au­thor­i­ties’ fis­cal pro­gramme”.

In Sep­tem­ber last year, Fi­nance and Plan­ning Min­is­ter, Stan­ley Raghoe­bars­ing, de­fend­ed the de­ci­sion of the Chan­drikaper­sad San­tokhi gov­ern­ment to amend the VAT, admt­ting then that mis­takes had been made in its im­ple­men­ta­tion..

He told the Na­tion­al as­sem­bly that the tax base of the prod­ucts should have been 60 per cent in­stead of the cur­rent 38 per cent and that the Cen­tral Bank of Suri­name had cal­cu­lat­ed that the in­tro­duc­tion of 10 per cent VAT rais­es in­fla­tion by 1.1 per cent and that an in­fla­tion rate of 40 per cent had been ex­pect­ed for last year.

Trade unions and op­po­si­tion par­ties said that the amend­ment to the VAT is a con­di­tion out­lined by the MF for pro­vid­ing as­sis­tance to Suri­name.