Grenada Backs Away From Contentious 5% Levy

by Leroy Baker, Tax-News.com, New York

09 January 2006

The Government of Grenada, which wants to slap a 5% levy onto workers' salaries to help pay for reconstruction after Hurricane Ivan, has bowed to public outrage by allowing wider discussion of the measure before it is implemented.

The levy - call it a tax? - was to have been imposed from 1st January, but objections, including a threat by the Trades Union Council (TUC) that it would stage a month of protest action, has forced the government's hand.

The Cabinet has now agreed to include the Grenada Employers Federation and the Grenada Conference of Churches in talks about the introduction of the levy, and has postponed its introduction.

"We've tried on several occasions to dialogue with the government. TUC went as far as submitting a position paper to the Ministers of Labour and Finance and we asked for dialogue with them and they haven't even acknowledged receipt of the position paper," said TUC's President Madonna Harford.

At first, the Government planned to apply the 5% deduction to the whole of workers' salaries but has since agreed to except the first EC$1,000 (US$370).

Meanwhile, Democratic Congresswoman Barbara Lee of California has complimented the Government and people of Grenada on their reconstruction work while on a visit to the island, saying that much had been achieved since Hurricane Ivan.

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