Call to reduce VAT

ECONOMIST Professor Michael Howard is calling on Government to reduce the value added tax (VAT) to 16 per cent from its current 17.5 per cent.

While giving the Freundel Stuart administration the “thumbs up” for avoiding currency devaluation and zero foreign reserves, Howard is suggesting that the VAT reduction would ease a lot of the pressure on the economy.

“This adjustment alone would relieve the fiscal drag on the economy by raising business confidence and expectations and stimulating revenues from increased sales,” he told the DAILY NATION yesterday.

The retired University of the West Indies senior lecturer warned, however, against making any adjustments to the current income tax system. (TS)

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