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Tax reform, national debt and high oil prices must be addressed says PM Douglas
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| Some of the participants at the National Consultation on the Economy (Photo by Erasmus Williams) |
BASSETERRE, ST. KITTS, OCTOBER 15TH 2007 (CUOPM) – St. Kitts and Nevis’ Prime Minister Hon. Dr. Denzil L. Douglas has listed a myriad of issues. Among them were tax reform, combating money laundering, the national debt and high oil prices. In the discussion, the Prime Minister explained that the Federation must continue to address in the short to medium term, because of their impact on the transformation process and their considerable influence on the nation’s ability to build human and social capital.
“These include the wide range of issues relating to our strategic response to HIV/AIDS, chronic non-communicable diseases (NCDs) and other significant health matters that affect the quality of life of our people; population aging issues which could begin to exert pressures on our health care system as well as our pensions and social security system; sustainability of our tourism product through protection of our environment; and the continued focus on the maintenance of law and order which is a vital necessity for the safety of our people and for growth and development,” said Prime Minister Douglas as he addressed some 300 persons attending the National Consultation on the Economy.
Dr. Douglas said that the policy responses to these challenges will only be effective when nationals and stakeholders take ownership of the outcomes.
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“This is why we must lay the proper foundation to empower our people to take their rightful places as proud citizens of our land and come up with solutions which will benefit all of us. This is the reason for our focus on the strengthening of our human and social capital in these consultations. It is important that we understand the significance of these consultations as they represent the public private sector approach which my Government continues to take in the transformation of our economy,” said the St. Kitts and Nevis leader.
He said that the need for tax reform will also arise in the context of regionalisation. “We are making every effort to ensure that we carry out an extensive review of our tax system in order to ensure that Government revenues remain adequate to provide the services which our citizens expect and demand,”
With the assistance of CARTAC, “we expect to conduct a comprehensive review of our tax system which will include further evaluating the feasibility of introducing a Transaction-based Tax eg. VAT, as well as examine how we can streamline our current tax system. This will also include an intense education and information-sharing campaign,” said Dr. Douglas.
Government has been dealing with the financial market requirements which were imposed following the September 11th attack in the United States.
“This has been very costly for us as a small economy putting systems in place to assure the international community that we have measures in place to combat money laundering and terrorist financing,” said Dr. Douglas, who disclosed that in 2008, St. Kitts and Nevis will undergo an Anti-Money Laundering review by the Caribbean Financial Action Task Force.
Prime Minister Douglas, who is also Minister of Finance used the occasion to urge all citizens, in particular service providers and those engaged in the provision of banking and other financial services “to ensure that they continue to adhere to the regulations and procedures that we have put in place in our jurisdiction in order to ensure that the assessment results are positive for our country.”
The Federation he said continues to suffer from the impact of high oil prices in particular as it relates to the cost of fuel for electricity generation and called on citizens and businesses to practice energy conservation and to come up with creative solutions for dealing with this issue which is expected to continue to confront the nation over the medium term.
~~Adz:Left~~Dr. Douglas said that in dealing with the fiscal situation, the high debt service cost has been the focus for some time and there was determination to deal with this situation in an orderly, non-chaotic and effective manner.
Giving a brief back ground to the debt situation which includes the impact of the high per capita income that has caused the Federation to be graduated from nearly all sources of concessional finances, which in the past have supported development, Prime Minister Douglas noted this has “constrained our ability to implement all of the necessary capital investment projects.”
Dr. Douglas said that the premature graduation of the Federation from concessional funding has contributed to the higher cost of development and translated ultimately into higher debt.
“In addition, the impact of hurricanes which necessitated the rebuilding of our infrastructure resulted in an increase in the debt at a time when concessional resources were not available. Our extremely high vulnerability index is not a comfort to us as we plan strategies to overcome our debt situation and fiscal challenges,” said Prime Minister Douglas, who called for a look at the scope and severity of the challenges which confront nationals realistically.
“However we must not be daunted by the enormity of the issues. We must maintain hope in our ability to successfully deal with these issues. We must retain our resolve to maintain sound macro economic policies that would promote a stable economy, characterized by steady and sustainable growth,” said the Prime Minister who noted that this year the focus of attention should be on people development side of the transformation.
“If we are successful in fostering an environment where our people become lifelong learners and innovators and where integrity, honesty, moral character and a spirit of excellence are combined with skills and technical capabilities then there will be no end to what we can achieve,” said Prime Minister Douglas, who urged a focus on interventions on these essential issues and on any other issues deemed critical to the transformation of the economy.
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