PSC Chair welcomes measures in emergency budget
– says VAT removals will allow for the growth in the productive sectors
The list of measures outlined by His Excellency, Dr. Mohamed Irfaan Ali in the upcoming emergency budget is being welcomed by Chairman of the Private Sector Commission Nicholas Boyer.
During an appearance on NCN’s television programme ‘Insight’, the PSC Chair said that the measures are timely and will benefit every sector.
Highlighting removal of Value Added Tax (VAT) in the manufacturing sector, Mr. Boyer said the previous government enacted taxes on the small productive base of the country which in turn reduced the profitability of the industries.
He pointed out that the profits the industries make are used to reinvest and expand operations, pointing out that if the profits are being taxed, they become counterproductive.
“Those taxes were very counterproductive and it is good seeing them being removed today. The key is that they are allowing for the growth in the productive sector which then generates the economic spillovers into the downstream”
The reversal of tax on all exports, is another measure Mr. Boyer said will help to boost the country’s economy. He noted that the taxes on exports placed a strain on companies competing with the foreign market.
“The key is you want to stimulate these sectors that earn foreign exchange so that you can get a healthy flow of foreign exchange coming into the country and the businesses and persons can use that foreign exchange,” Mr. Boyer stated.
Another measure that will boost the economy is the granting of special incentives for new hotel development coupled with the reversal of VAT on building and construction materials. Mr. Boyer is of the view that this is “strategic and genius” by the government.
“If you have four projects with 200 persons, that is 800 jobs in four projects and then those jobs after you complete the facility, they then go from construction jobs to service jobs plus you get foreign exchange when persons stay at the hotel… so clearly getting those type of projects kicked off now even though we have the coronavirus pandemic, it is very strategic,” he stated. The PSC Chairman added that he is excited for the implementation of the emergency budget which is slated to be presented on Wednesday, September 9, 2020.