Opposition Supports Motion of Relief for Burdened Manufacturers

In its April 26, 2007 edition the Jamaica Gleaner features a story under the following headline: Anthony Criticizes VAT as Oppressive and Undesirable for Workers and Poor! The paper reported that Prime Minister John Compton, who recently had unseated Anthony as Saint Lucia’s prime minister, that week had announced in parliament that the consumption tax would be introduced within a year, “saying it was necessary as a much needed revenue earner for Saint Lucia . . .”  

In his own contribution to the budget debate, the paper noted, Anthony said he considered the tax unnecessary and quoted him thus: “We were never persuaded that VAT was the wisest choice because we believe it is potentially an oppressive tax. It is oppressive to the poor, it is oppressive to workers. The fact is that the cost of living in Saint Lucia is one of the lowest, if not the lowest, in the OECS. That is why they come to shop here.”

The Jamaican newspaper also reported Anthony as stating that in every country where VAT was introduced, increased food prices immediately followed. Moreover: “When the minister of finance tells us that he is going to introduce VAT that is revenue neutral . . . all of us know the sole reason why you have to introduce VAT is not only to spread the burden but, most importantly, to raise additional revenue.”

The record shows VAT was not implemented by Sir John. Following his passing in 2007 his successor Stephenson King stated his intention to do so, but only depending on the country’s economic weather. Finally it was VAT’s most vehement critic—who placed on Saint Lucia’s statute books what earlier he had emotionally described as “an oppressive law, anti-worker and anti-poor.” 

The last thing anyone might’ve expected while following Tuesday’s House meeting was an unending repetition of the history of VAT, obviously salted to taste. After all, the motion before the parliament was by any measure a simple amendment to the act’s definition of “educational supplies, including newspapers, trade catalogues, advertising matter, magazines, books, patterns and samples with no commercial value.”

As the prime minister observed during his introduction of Tuesday’s motion, the Act in its original form disadvantaged local manufacturers to the benefit of exporters in other countries. “We truly believe that this was an error . . . I cannot believe that either government would want to be prejudiced against any of its local manufacturers.”  He added that the Act as it stood “exempts the importation of such goods as per Schedule 2 and that similar goods are subject to VAT when produced in Saint Lucia.” 

Perhaps by coincidence Kenny Anthony was not on hand to speak on the proposed relief for local manufacturers. Neither was the usually garrulous Alva Baptiste, recently removed from his position as his party’s deputy leader. Philip J. Pierre, Anthony’s second in command when he was prime minister, was first on his feet to offer support for the prime minister’s motion. His attendant three opposition colleagues in their own turn also expressed their unconditional support. 

Indeed, the whole side claimed they had expected the particular House sitting to last but a few minutes, thereby implying the prime minister may have hit the nail on the head when he suggested in his introduction that it was likely a mistake was made when VAT was passed into law despite that it gave foreign companies a distinct advantage over their native counterparts.

But then in a letter dated September 12, 2007 it was brought to the notice of the prime minister that VAT as constructed placed local printer/manufacturers at “a disastrous disadvantage, for the obvious reason it makes it impossible for the Saint Lucian to be competitive in this particularly price-conscious market.”

The letter from the director of Star Publishing Company was copied to the commerce minister, her permanent secretary, the VAT project coordinator and the president of the St. Lucia Manufacturers’ Association. It went on to tell the prime minister: “We urge you to protect the Saint Lucian market. Without your protection the local manufacturer will quickly dry up and cease to exist. VAT is supposed to be administered fairly. By this example, I suggest it is not. As a manufacturer I have invested millions in establishing and maintaining a state of the art printing facility with a proud reputation throughout the Caribbean. We’ve also invested heavily in the training of Saint Lucians to deliver the standard our customers expect of us. I repeat: if you encourage the importation of VAT-exempt printed material, the Saint Lucian manufacturer will be disadvantaged out of business in no time at all . . . We further implore you to act with alacrity in this matter that surely is a life or death situation for local manufacturing.”

I have no sure way of knowing whether Philip J. Pierre was aware of our desperate letter to his prime minister. It would come as no surprise if he was not, keeping in mind Kenny Anthony’s record as prime minister. In all events, there was no response; not from the prime minister, not from the commerce minister. Meanwhile we were visited more often by the government’s auditors than by customers, many of whom told us with regret that our prices simply could not compete with our counterparts in Trinidad and elsewhere. Over five years Star Publishing lost millions of dollars, even as we continued to cope with overheads, water, electricity and so on. We were forced to send home loyal personnel that had long been with the company, people with dependents who relied on us for their livelihood.

The government’s attitude to the STAR made worse the changes brought about by the digital era. Soon there were the ominous threats on Facebook and elsewhere that our days were numbered. I have kept on file some of the more pernicious examples, especially some published in the weeks immediately preceding the 2016 elections. It seemed depressingly obvious to us that an orchestrated campaign against Star Publishing was underway, the price for being critical of the Kenny Anthony administration. It has indeed been no cake walk standing up to the below the belt hits—despite that this is the first time I’ve acknowledged this sad truth. The worst part has been the direct victimization of staff desperately in need of their jobs.  

Yes, so it was a bittersweet experience to witness, one by one, the House opposition supporting Tuesday’s amendment to the VAT Act, albeit five years after the damage it did, whether or not according to plan!