Businesses which consume a lot of foreign currency should be taxed higher while those who generate it should be rewarded with tax breaks.
This was the suggestion proposed by the Movement for Social Justice (MSJ) in response to Government’s new Value Added Tax (VAT) policy that was passed in Parliament last week.
At a media conference at the party’s San Fernando headquarters yesterday, political leader David Abdulah said that with Government modifying taxes to offset the shortfall in oil and gas revenue, the burden of forking out extra dollars to boost the economy should not fall on lower income citizens.
He said higher taxes should be taken from companies with revenues in the hundreds of millions and Government can encourage them to create new jobs, earn foreign exchange and invest in the economy through tax allowances.
He explained: “We are of the view that we should have a ‘re-look’ at the tax system so that corporations that earn above a certain amount in terms of their sales or annual turnover, their taxes should be moved up from 25 per cent to 30 or 35 per cent.
“Then they can earn a tax credit to bring their tax rate down if they are able to invest in research and development which is critical to creating innovation and sustainable economic activity. If they were to create new jobs, they can then get a tax credit for creating new jobs so that we can ensure that we have decent work for everyone in the country.
“They can also earn a tax credit if they are earning more foreign exchange because critical to the economy of Trinidad and Tobago is that situation of earning more foreign exchange in the context of lower oil and gas prices.”
With respect to the new VAT policy which saw zero-rated items being subjected to the new 12.5 per cent tax while others were reduced, he said Government should reexamine that policy. He said items such as books, computers and sporting equipment that are critical to young citizen’s development should not have increased taxes.
He also demanded that before February, the Consumer Affairs Division publish a list of prices for items that were once zero-rated and now subjected to VAT. Another list of prices was also demanded for those items that were reduced from 15 per cent to 12.5 per cent.
He said this would prevent price gouging by businesses and educate consumers on how to spend wisely. He added that although their will be an increase in the personal allowance for employed citizens, the extra dollars for those earning $5,000 monthly cannot offset the increases to their monthly bills.
Probe Mc Donald and Garcia in two weeks
With Opposition Senator Wayne Sturge raising allegations of misconduct against Housing Minister Marlene Mc Donald and Urban Development Corporation (Udecott) chairman Noel Garcia, Abdulah called in the Integrity Commission to conclude investigations in two weeks.
He said if probes are being done by the Office of the Director of Public Prosecutions and the police, they too must also finish in two weeks and the outcomes be made public. He said whether an offence was done within a year or a decade, wrongdoers must be punished.