Gail Alexan­der

UNC Sen­a­tor Damien Ly­der has 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 said at Sun­day’s UNC me­dia brief­ing in Port-of-Spain.

Ly­der was com­ment­ing on Fi­nance Min­is­ter Colm Im­bert’s con­fir­ma­tion last week 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.

The mid-year re­view will be de­liv­ered by Im­bert on Wednes­day with de­bate of the $3.8 bil­lion which was ap­proved last Fri­day by Par­lia­ment’s Stand­ing Fi­nance Com­mit­tee for sup­ple­men­ta­tion of the 2023 Bud­get.

The bud­get was $57 bil­lion when it was an­nounced last Oc­to­ber. The $3.8 bil­lion is for ad­di­tion­al fund­ing for 22 min­istries to con­tin­ue op­er­a­tions un­til the end of the fis­cal year in Sep­tem­ber.

Yes­ter­day, Ly­der 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.

“By keep­ing re­funds they’re treat­ing it like an in­ter­est-free loan and with­hold­ing much need­ed liq­uid­i­ty from man­u­fac­tur­ers, Min­is­ter Im­bert has been play­ing book­keep­er, in an ef­fort to jug­gle num­bers to ma­m­aguy cit­i­zens in­to think­ing the econ­o­my has been man­aged prop­er­ly.”