COMMENTARY: Who Is To Blame For The High Cost Of Living In Antigua And Barbuda: Abst Increase Or Greedy Business Owners?

..by Yves Ephraim 

WHO IS TO BLAME FOR THE HIGH COST OF LIVING IN ANTIGUA AND BARBUDA: ABST INCREASE OR GREEDY BUSINESSES OWNERS?

When the ABST was increased from 15% to 17%, many apologists for the government dismissed the increase as a mere 2% and said that in the interest of nation-building that this was an insignificant price to pay.

When the tax took effect, prices on the shelf soured and the people started to cry but the blame went directly to the merchants and business owners.

Business owners were accused of price gouging and for being unconscionably greedy. Righteously indignant government officials declared that this greed needed to be curbed through more price controls.

I have always maintained that blaming merchants for governments’ dishonesty regarding the actual effect of their tax increases is an unfortunate and universal tactic. Many times business owners are reluctant to even try to respond with the facts because of the possible repercussions.

I am always surprised that most people fail to consider that government, itself, can be just as greedy or more so.

I believe that you can draw your own conclusions of who is being dishonest when I work the numbers for you.

Let me work an actual example of what the taxes look like when importing a TV into Antigua and Barbuda to demonstrate the tax you would have paid when ABST was 15% and what that same TV might cost when the ABST was increased to 17%. A seemingly 2% increase. You are welcome to consult a broker to verify the calculations.

I will show you that this so-called simple 2% increase can actually yield a 7% increase in your import taxes. This is 5% more than touted.

Let us say that your TV cost US$1000.00. The shipping is US$100 and the insurance is US$25.00.

For tax calculation purposes this works out to US$1125.00 or what is referred to as the CIF value, ie (Cost, Insurance and Freight).

The duty on the TV is 5%. We must pay 10% RRC (Revenue Recovery Charge).

Take a look at the table below which show the breakdown before and after the 2% increase and let me know who you think is the actual price gouger?

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