Identifier
Created
Classification
Origin
08GRENADA129
2008-09-18 20:35:00
UNCLASSIFIED
Embassy Grenada
Cable title:  

GRENADA WEEKLY ACTIVITY REPORT FOR SEPTEMBER 7 - 13, 2008

Tags:  EFIN ECON SOCI XL GJ 
pdf how-to read a cable
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UNCLAS GRENADA 000129 

SIPDIS

E.O. 12958: N/A
TAGS: EFIN ECON SOCI XL GJ
SUBJECT: GRENADA WEEKLY ACTIVITY REPORT FOR SEPTEMBER 7 - 13, 2008

UNCLAS GRENADA 000129

SIPDIS

E.O. 12958: N/A
TAGS: EFIN ECON SOCI XL GJ
SUBJECT: GRENADA WEEKLY ACTIVITY REPORT FOR SEPTEMBER 7 - 13, 2008


1. (U) Embassy Grenada's weekly report (GWAR) provides a little
detail about events of interest that do not merit longer
reporting at this time.


2. (U) Begin GWAR text:


A. VAT to be put on hold
Grenada's Minister for Finance Nazim Burke announced that the
government will not implement Value Added Tax (VAT) until
October 2009 because the previous government had failed to leave
a foundation in place for the new tax regime. He added that
Caribbean Regional Technical Assistance Centre (CARTAC)
officials advised the government that it would be impractical to
institute the VAT before the final quarter of 2009. In a review
of the tax system, earlier this year, the IMF had recommended
that Grenada implement the VAT system urgently as part of its
tax reform measures.

The National Reconstruction Levy (NRL),instituted after
Hurricane Ivan devastated the country in 09/2004, is scheduled
to expire on December 31, 2008. If VAT implementation is
delayed for another year, it is not clear what income the
government will have to support operations, let alone to fulfill
its campaign promises to increase pensions and reduce the cost
of living.


B. Grenada teachers and civil servants get paid
The Government of Grenada took power declaring that the treasury
was empty. However, last week teachers received over US$833,000
in back pay, fulfilling an agreement signed by the previous
government and the Grenada Union of Teachers (GUT) in June 2008.
At the same time, teachers received one-time payments totaling
nearly US$2 million covering 2007. The government has already
paid more than US$9 million in retroactive payments to various
public officers and civil servants, even though the Minister for
Finance had announced that there was not enough money to pay
civil servants salaries for August.


C. IMF makes second visit in three months
A delegation from the International Monetary Fund (IMF) returned
to Grenada for the second time since the new government took
office on July 9, to conduct the second review of the
IMF-supported Poverty Reduction and Growth Facility (PRGF)
program. While in Grenada the team will meet with the Minister
for Finance, other government officials, as well as
representatives of the public and private sectors. Among other
economic matters, discussions will focus on recent economic
developments and Grenada's present fiscal performance.

End text.

MCISAAC