Mr. . NIGEL JOHN, PRESIDENT OF THE GRENADA CHAMBER OF INDUSTRY AND COMMERCE (GCIC)

The president said the GCIC had prepared a National Export Strategy which was launched in October 2006. This strategy seeks to identify sectors and industries which have or may have a competitive advantage given certain strengths and qualities that Grenada has.

It then looks at what constrains us as a country from optimizing out potential in the sectors and industries looked at.
Tourism was one of the main sectors considered including yachting, a subsector which if its full potential is realized can make Grenada one of the top yachting destinations in the world.
John said the reason for Grenada’s race car pace of inflation is mainly due to the worldwide hefty increase in fuel prices.
Since Grenada is a consumer society meaning we import and consume much more than we produce and export there is an imbalance and any country that has such a huge imbalance will experience significant price increases or crippling inflation as world prices move.

John thinks that with proper planning, focus and dedication it should not be too difficult to get up to international standards in the manufacturing industry for instance. To his mind we as a people and government should really try to maximize our potential in this sector because we need to grow the economy and to do this we need to diversify.

All agree that gone are the days when we could depend on sun, sea and sand in tourism or a small number of commodities in agriculture. We need to utilize modern technology not indiscriminately but to a relevant degree to make production effective and of a high standard.

John added that the skills people learn must be applicable to what is needed for the development of the various sectors of our country in a general sense. Being the organization that unites and looks after the affairs of the private sector the GCIC has its views on the soon to be reintroduced Value Added Tax (VAT).

The Chamber president explained that the private sector had always advocated a more equitable taxation system. He said they had always had concerns that the consumption based taxes can negatively impact the lower income group through items that should ordinarily be low priced.

The chamber is then working with government to ensure that 0 rated items reach the lower income persons who do not attract VAT.
John said from the Chamber’s point of view the previous taxation system made it seem like a bad thing to be in business and to be profitable. According to information from the Central Statistical Office, he said government collects 80% of its taxation from 20% of the businesses.

That is far from equitable John said and it means that businesses are encouraged to be noncompliant as far as their obligations are concerned. He explained if you are carrying the bulk of the tax obligations in the country you will try your best to fall within the 80% that are not contributing. John does not think taxation should be in such a form that one feels squashed but one should be willing ready to make his contribution. He referred to a comment by eminent Grenadian Sir Alister Mc Intyre who said that the tax rate should be reduced and nuisance taxes should be removed. The VAT is doing just that since it will replace the General Consumption Tax, the Airline Ticket Tax and the Vehicle Purchase Tax.

However as with anything else there will be some concerns about its administration. The Chamber president said we have to ensure that the poorest persons are not negatively affected and he is concerned that small businesses may become noncompetitive under the VAT system.

According to him the Customs Department and the Grenada Ports Authority are deeply involved in the administration of VAT at the advisory level and the steering committee level. Custom has an internal steering committee for the training and information of officers.

John said with the coming of VAT also businesses will be encouraged to implement effective internal controls, keep disciplined, accurate accounts and maintain proper records.
He wants to dispel with the possibility that if things are not done properly small businesses will be marginalized.

Contrary to some people’s fears prices will go down in some cases since GCT is applied at a higher rate than VAT. There will be different rates on different items.

Service providers have traditionally been non compliant because it is difficult to assess them for these kinds of taxes but in this case systems are being put in place to ensure that they pay fairly.

John advocates that it is very important for everyone to comply and pay their fair share of taxes. He said regardless to what one thinks about a government if we don’t meet our tax obligations it is impossible to build a country.

The reintroduced VAT system will only work though, he said if we have the right platform, the right staff in place and the right training of that staff. He thinks the Business resource Center should be partnered with the small businesses which don’t have the administrative capacity to help them improve this capacity and to effectively tackle the VAT system.

As far as government’s ability to administer the tax is concerned john has some concerns. He said the records show that while the government has improved in terms of tax collection they have not improved in term of spending.

He said for the tax system to work there must be some administrative reform in some departments. Transparency and accountability are important especially in the areas of bidding and procurement.
Development of human resources should be a priority and the chamber is not of the view that we are creating the human resources to support the industry base within our national boundaries. We need to take advantage of all our country has to offer in terms of our natural assets human and otherwise.

The Chamber is concerned that the government is sometimes slow off the mark in many important developmental endeavors but can move very quickly on other thing that are not so important for the development of the country. A case of mixed up priorities?

He has a personal concern with the sale of prime government lands to foreign investors rather than leasing it for a reasonable period.
John has no problems with foreign investors because he thinks that without them it will be much more difficult to develop our country. The Chamber as a matter of fact prefers to work along with these investors rather than take the confrontational approach but we must still be careful with the deals we make and how it may affect our country and people in the future.