St Vincent Opposition Leader Ralph Gonsalves on Monday provided a sharp critique of the VAT-free day, specifically targeting claims made by National Security Minister St Clair Leacock that the event was a “huge success” with a turnover of $28 million.
Gonsalves characterised these claims as a “gimmick” intended for headlines rather than a reflection of economic reality.
The critique is centered on the following mathematical and logical points:
Mathematical Implausibility: Based on the 2024 domestic VAT collection of approximately $133 million (and a 2025 estimate of $159 million), the speaker calculates that the government expects to collect about $533,000 in VAT per day across 300 shopping days.
Gonsalves said at a 16% VAT rate, this collection suggests an average daily turnover of just over $3 million and argues that a $28 million turnover in a single day—nearly nine times the daily average—is statistically improbable.
Restricted Scope: Gonsalves notes that the VAT-free status did not apply to everything; it excluded services, higher purchase agreements, and motor vehicles. This makes the reported $28 million turnover even less believable, as a significant portion of regular economic activity remained subject to the tax.
The “Gimmick” Nature of Shifted Spending: The Opposition Leader contends that such days do not necessarily increase overall economic activity. Instead, they cause a temporary shift in timing, where consumers spend less in the week leading up to the VAT-free day and the days immediately following it, waiting to make their purchases on the specific date.
Lack of Grounding in Data: The former pm challenged the source of Leacock’s data, suggesting that any professional interrogation by public servants would show the numbers are merely “shooting in the breeze.” He further notes that a $28 million daily turnover is highly unlikely when compared to the country’s total GDP of $3.2 billion.
Gonsalves further stated that while ministers use “general statements” and “declarations of words” to suggest success, the ‘relentless arithmetic’ of the budget and actual VAT revenue does not support the narrative that the VAT-free day generated such massive turnover.