Friday, November 12, 2010

Electricity & VAT

We might have an 85% increase in our electricity bills??!! Well, we still haven't seen our July bill, so at least it'll take awhile before we feel the pain. New care package: Kerosene lamps and oil, candles, more games...Wonder if the stuff in our fridge would fit in a cooler? Maybe we shouldn't have sold Jacumba. People who run their a/c are going to have a literal melt-down. The Marriott (and others) will be better off using their generator full time.

I'll tell ya what, if the government does raise electricity (even 25%), especially after businesses started taking advantage of the VAT tax to raise prices, it's going be really interesting to see what happens to businesses, investment and tourism here. The government took away a 22.5% consumption tax and replaced it by a reimbursable VAT of 17% and yet we just saw prices go up?? Most of the businesses simply kept their prices where they always were and then added the VAT tax. Somehow, I don't think that's how it was supposed to work.

I did get my sneakers yesterday. I pretty much had a choice of one pair. Even with the damn new VAT tax (that added $30EC to my purchase), I still paid about what I would have for them in the States. Of course, in the States, I would have had more of a choice and picked a cheaper brand, but, well, if pigs could fly...I have to admit, that I really broke them in during the kickboxing class last night and they were light as a feather. The test will be how well the soles hold up to the hills I run. Of course, I will not be wearing them hashing, as I don't want to have to drink out of one of them...

So back to the VAT tax. You can always tell what a society thinks is important by what they don't tax. Here's what's tax exempt on this island:

Tuna (canned); Sardine (canned); Skipjack and Bonito (canned); Sardinella, Brislings/Sprats (canned); Salmon (canned); Herrings (canned); Mackerel (canned); Chicken; Cheese; Canned Sausages; Corn Beef; Salt Fish/Herrings (Fresh); Mackerel (fresh); Salmon (Fresh); Ham (smoked, chilled, frozen); Baby Beverages (Juices); Pig Tails, Ears and Snout; Exercise books; Insecticides and rodenticides.

The import duty has been reduced on: Eggs (from 40% to 20%), mosquito coils (from 25% to 5%), Pasta, Margarine/Shortening/Lard and Vegetable Oil (from 25% to 10%), and Tomato Ketchup (from 20% to 5%).
  • Why are we importing eggs at all? I would much rather get my eggs from a local farmer than the big commercial buttheads in the U.S. that keep the chickens in deplorable conditions and inject them with steroids and hormones.
  • Good thing mosquito coils are on there, because we're going to be sitting outside a lot more if the bills go up and we can't run our ceiling fans. As it is, we turn them off as we go from room to room, but it won't be enough!
Several items and services are zero-rated [?] including: adult disposable diapers, Baby disposable diapers, Bread, Flour, Fuel, Infant Formula, Milk, Oats, Rice, Sale of commercial property from one VAT registrant to another and Sugar. I think rent, electricity, and water are exempt too.

Toilet paper - where is toilet paper! I think that should be tax-exempt! I can hear Nat & Kat screaming "Beer! Beer should be exempt too!"

The test is going to be how much of this income goes back into island infrastructure (especially considering the island's debt)? You can't become one of the most expensive islands in the Caribbean and then still have sewage running down the street gutters; have potholed streets canopied by overgrown roadside foliage; still have electricity outages; and have masked, armed gang members conducting hold-ups every week. I hope the businesses reaping from their new profits, give back by stocking their shelves and adding to their offerings, at least. Yep, gonna be interesting...