GOV’T SUPPORT FOR SECTORS REAFFIRMED

THE Government of Grenada is committed to supporting the manufacturing and tourism sectors, a position that is borne out in measures implemented by Government, as well as its commitment to engaging the private sector and involving it in policy decisions.

This was the assertion made via a press statement issued by the Prime Minister’s Office last Friday. It was followed by a full press conference on Monday.

Friday’s statement was in swift response to concerns raised during a press conference held by representatives of the Grenada Chamber of Industry and Commerce (GCIC) and the Grenada Hotel and Tourism Association last Thursday, November 15.

At the time the charge was made that Government was not providing enough support to those sectors, while dissatisfaction was also expressed with the lack of new Foreign Direct Investment and the pace of project implementation.

However, in its press statement, the Government countered that it does in fact offer a wide range of incentives and support measures to those two sectors, even at the expense of Government coffers.

“With these incentives, Government has given up millions of dollars in revenue; for example, the 10 per cent Manufacturers Rebate has resulted in the giving up of over $10 million annually,” it was noted.

The Government statement also pointed to the emphasis it has placed on dialogue with members of the private sector, citing the crafting of a Social Protocol in 2008-2009 – a joint venture with the private sector. In addition, it was noted that private sector representation was facilitated on various committees and bodies that advise on public policy.

“In recent months, dialogue has been ongoing between the Manufacturing and Hotel Sectors with regard to the peculiar challenges they face,” read the statement. “Discussions have been facilitated by the Prime Minister, the Minister for Finance and the Minister for Tourism, as well as by a number of public officers. As far as Government is concerned these discussions are ongoing and certainly cannot be resolved at press conferences.


“Government has held bi-lateral consultations with manufacturers, hoteliers, representatives of the construction sector, small business operators, agro-processors, the banking community, as well as with many professional bodies. In the period leading to the introduction of the Value Added Tax (VAT), more than 700 briefing sessions were held by the Inland Revenue Department with private sector businesses,” it added.

The statement also expressed Government’s intention to widen its outreach to small and micro businesses.

However, it was noted that members of the private sector need to appreciate the “real fiscal limitations” facing the country, which “limit the extent to which Government can give up additional revenue beyond what has already been given up, without further eroding Government’s ability to meet its commitments”. (YA/PR)

Among the support measures highlighted were:

1. No Common External Tariff (CET) is paid on packaging materials, raw materials, spare parts and equipment.
2. The maintenance of an import licence regime for products competing with locally
manufactured goods.
3. Exemption of Annual Stamp Tax on exports of manufactured products.
4. Income Tax relief under the Grenada Investment Promotions Act.
5. Zero Rating of VAT on Exports.
6. Exemption of Excise Tax on alcohol to be used as an input into the manufacturing process.
7. 10% rebate on VAT exclusive sales to be used to offset any tax arrears except VAT.
8. Reduced VAT rate of 10% on accommodation.
9. 50% retention of VAT during the off-season (September-November 2010).
10. VAT exemption of Service Charge.
11. Most hotels enjoy a tax holiday (accelerated depreciation).