GAMBIA AS FORMER “GUINEA PIG” FOR ECOWAS VAT TAX ENDS CONSUMER ECONOMY
(Please note that The Gambia was “Selected” as the Test Case for the ECOWAS states – Same as Plastic Bags, Cigarette Labeling, etc. Funds were pledged and paid to offset government costs and “Special Considerations”).
That is the stark and certain consequence of a VAT Tax. Just look to Europe for the beleaguered life aftermath of this incremental method of extracting additional tribute on every level of production and distribution.
The recent trial balloon to place a VAT on the table for a new additional tax is indefensible. The idea of replacing the import and or income tax with a consumption levy would be a legitimate debate. However, all you hear is that the government needs more revenue to offset historic deficits. Please! Who among the public with command of their mental faculties believe that bleeding the public more will stop the political class from spending more deficit funds. (Reflected as D47 Billion at the inception of the 3rd Beginning)
Supposedly, a value-added tax is a magic elixir for curing budget deficits and excessive debt. Quack remedy would be more like it. If it worked, you would observe that countries with a VAT had budget surpluses and no debt problems. However, almost every country that has a VAT is plagued with budget deficits and excessive debt.
So, what actually comprises VAT?
It is an excise tax based on the value added to a product at each stage of production or distribution: value added is arrived at by subtracting from the total value of the product at the end of each production or distribution stage the value of the goods bought at its inception.
Are you ready for the end of the Gambian consumer economy? Well, your voice needs to sound loud and clear if you want to save the last remnants of a middle class existence. Forget about upward mobility or affluence, the basic elements of a respectable life is being targeted for extinction. That is the stark and certain consequence of a VAT Tax. Just look to Europe for the beleaguered life aftermath of this incremental method of extracting additional tribute on every level of production and distribution. Everyone must oppose this overt attempt to impoverish, unless your goal is to break the back of consumers and lower permanently the standard of living of the country.
The recent trial balloon to place a VAT on the table for a new additional tax is indefensible. However, all you hear is that the government needs more revenue to offset historic deficits. Please! Who among you with command of their mental faculties believe that bleeding the public more will stop the political class from spending even more money?
Consider this: When the Idea/concept was introduced, the possibility that the VAT might not produce the then current tax Takings, was a cause for concern. The cure for any potential deficit was to leave the other programs in place.
Let us view a sample of this system!
For a simple example of the Inflationary result of VAT, we consider a box of matches that most families use weekly. This essential item lights fires, candles and mosquito coils and prior to the inception of the VAT, it went from 50 Butus to 75 Butus in anticipation of the system. Sellers with 1 Million Dalasis volume were required to register under the program and collect and the pay GRA on a monthly basis.
The importer raised the price to attach the 15% and that of course increased his total cost to maintain the profit margin. The wholesaler had also registered and with the new price added the VAT and followed the same pattern as the importer. Next, the distributer followed with his new price and at the retail end, where the public obtains the small necessary box, they now pay D2.00 while each of the VAT parties submits a check to the GRA, a combined deadly increase. With such a system, all the commodities likewise increased and will continue too. Such a system cannot help but inflate the retail prices when the system is supposed to be an End User fee. What ‘Added Value’ can be shown?
An additional tax from a VAT on top of all the service fees, tariffs and duties invariably widens the gap between the haves and the have not’s. The National wealth is sinking and most people are hurting. What to do to resolve or remove the public from an inflationary spiral? Scrap it while it is still young or model a better program.
About that same period, the NAM’s, nudged by the executive decided to remove the fuel subsidy. The government Spending Oven requires fuel and plenty of it when one considers the national debt of 47 Billion Dalasis. The NAM’s somewhat wisely noted the severe reaction that transpired in Nigeria when the fuel price shot up, so they opted for incremental reduction in tranches gradually removing the approximate D10 per liter and the price rose accordingly. It is a luxury tax in most of the world. One opts to own and drive a car, and then one pays the tax to feed the oven. Here it is an add onto the multitude of taxes. It is not possible to have a European lifestyle using a Less Developed income.
Presently, donor countries and project promoters are ready to deposit additional financial obligations, what will pay for these in the future?
COG – CIVILAN OVERSIGHT GROUP
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