Saturday, April 20, 2024

Suriname Finance Minister defends amendment to VAT

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PARAMARIBO – Finance and Planning Minister, Stanley Raghoebarsing, has sought to defend the decision of the government to amend the value added tax (VAT) saying that mistakes had been made in its implementation.

He told the National assembly yesterday that the tax base of the products should have been 60 per cent instead of the current 38 per cent.

Raghoebarsing told legislators that the Central Bank of Suriname has calculated that the introduction of ten per cent VAT raises inflation by 1.1 per cent and that an inflation rate of 40 per cent is expected for this year.

But he promised that the Santokhi government would do everything possible to deal with the impact of the new monetary policy.

He said a supplementary budget will also be submitted later this year.

But leader of the Brotherhood & Unity in Politics (BEP), Ronny Asabina, said that the amendment to the VAT is a condition outlined by the International Monetary Fund (IMF) for providing assistance to the Dutch-speaking Caribbean Community (CARICOM) country.

“It is surrender, surrender and surrender. No feathers can be plucked from a bald chicken,” he added.

Leader of the National Democratic Party (NDP) in Parliament, Rabin Parmessar has said that his party is not willing to back the new measure if there are no changes drastically in the law.

Parmessar said that the VAT on fuel will increase from five to ten per cent, questioning the price to be paid at the pump.

An IMF delegation is due here this month and Parmessar said that the party has already made it clear to the IMF that the people of Suriname cannot bear any more sacrifices.

He told legislators, too many burden-increasing measures have been taken in a short period of time.

But Raghoebarsing remains optimistic about the forthcoming assessment of the implementation of the structural adjustment programme by the IMF.

He told Parliament that agreement was reached on a technical level on Wednesday with the IMF mission that came to Paramaribo for the evaluation and that the positive response from the IMF mission indicates that “we are all on the right track”.

The IMF mission spoke with, among others, the leadership of parliament, but also with the coalition and the opposition.

“We think that alone has added value to that mission, to the work and to the Case Suriname,” said Raghoebarsing.

On Thursday, the IMF announced that it  has reached a staff-level agreement with Suriname on the third review of the country’s economic reform programme supported by the 36-month Extended Fund Facility (EFF) arrangement.

The agreement is subject to approval by the IMF’s Executive Board and that on completion of this review, Suriname will have access to SDR39.4 million (about US$53 million), bringing total programme disbursements to date to SDR157.6 million (about US$212 million). (CMC)

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