All is still not well with government and the Grenada Trades Union Council (GTUC) on the controversial 5% income tax (Reconstruction Levy) that the ruling New National Party (NNP) administration wants to implement from the beginning of the new year.

The two sides met on Thursday in St. George’s and were forced to broker a deal that will keep workers off the streets for a few days as the trade union umbrella body continues its threats to engage in protest action against the tax.

The TUC has declared January as the Month of Protest Action in Grenada if the Keith Mitchell-led government fails to withdraw the 5% tax.

Informed sources told GRENADA TODAY that the TUC delegation decided to boycott the latest meeting due to the low-level delegation sent by the Keith Mitchell-led government for the talks.

The threat was being made in the face of a high-powered team of officials from the Grenada Chamber of Industry and Commerce (GCIC) that also showed up for the crucial meeting.

The chamber team included its President Nigel John, its current representative in the Senate, Aaron Moses, as well as Manager of Hubbards, Allan Bierzynski, and General Manager of GRENLEC, Vernon Lawrence.

According to a well-placed source, the government team was comprised of Acting Permanent Secretary in the Ministry of Finance, Lennox “Toes” Andrews and Permanent Secretary in the Ministry of Education, Michael Pierre

When the two sides met last week, the government team included two senior government ministers - Finance Minister Anthony Boatswain and Labour Minister, Claris Charles.

The source said the TUC felt that given the crucial and delicate nature of the current discussions, the Mitchell government appeared to be treating the situation with scant courtesy given its low-level representation at the meeting.

He spoke of the TUC indicating to Andrews from the onset that it would not prepared to meet with the government delegation if a more high-level team was not sent by the regime to hammer out an agreement.

He said that the Acting PS in the Ministry of Finance was forced to call Minister Boatswain into the meeting in order to avoid a break down in the talks.

The source indicated that during the discussions, the senior government minister informed the meeting that the Mitchell administration was holding to its view that the 5% would be implemented unless the TUC can come up with an alternative approach.

Minister Boatswain stated that government was prepared to give tax breaks on persons who were forced to enter into second mortgages on their homes due to damage to their property by Hurricanes Ivan and Emily.

In addition, special consideration will be given to families with children attending tertiary institutions like the TA Marryshow Community College (TAMCC).

The source pointed out that the meeting ended with Boatswain stating that the Cabinet of Ministers will meet on Tuesday, the first working day in the new year to look at the TUC position and to decide whether to go ahead and implement the tax.

He said the trade unions would plot their next move depending on the decision reached by the Mitchell Cabinet.

The official did not rule out the TUC giving instructions to its members to proceed with some form of protest action if the Mitchell government rejected their proposals outright.

The TUC is insisting that workers cannot afford to pay the 5% tax at this stage given their dire financial plight.

The Chamber is reportedly not opposed to the 5% tax, advocating that its members can afford to pay the levy.

However, the island’s leading private sector grouping is urging the Mitchell government to expand the levy into a full blown income tax for ease of implementation.

The NNP had campaigned on “No Income Tax” when it won the 1995 general elections in the country.

Following is the full text of a release issued by the participants at Thursday’s meeting:

In keeping with a decision made at a meeting on Friday 23rd, December 2005, a follow up meeting of representatives from the Grenada Trades Union Council (GTUC), the Grenada Chamber Industry & Commerce (GCIC), the Ministry of Finance and the Ministry of Education and Labour was held on Thursday 29th December 2005 at the Ministry of Finance Conference room at 10:00 am.

The Meeting gave further consideration to:

(i). The implications of the planned implementation of the National Reconstruction Levy (NRL)

(ii). The revenue needs of Grenada

(iii). The proposed withdrawal of the deadlines submitted by the Government of Grenada with regards to the imposition of the Levy and the Grenada Trades Union Council (GTUC) with regards to taking protest action.

The Meeting decided:

(1). That all parties will hold internal consultations with a view towards identifying alternative mechanisms for taxation on earnings.

(2). That both the Government of Grenada and the Grenada Trades Union Council (GTUC) will submit proposals with regards to item 1, to the Grenada Chamber Industry & Commerce (GCIC) for consolidation and submission to a meeting of the three parties on Wednesday January 11th 2006 at 10:00 a.m. at the Ministry of Finance Conference Room.

The consolidated document will also include the proposal by the GCIC with respect to mechanisms for taxation on earnings.

(3). The Minister of Finance will communicate with the GTUC on Tuesday 3rd January 2006, with regards to the extension of the deadline for the implementation of the NRL.

As a result, the GTUC has shifted its deadline for taking further action to the same day, Tuesday 3rd January 2006.

(4). That all negotiations will be finalised by Friday 13th January 2006, to allow for the final preparation of the Estimates of Revenue and Expenditure for the year 2006.

HON ANTHONY BOATSWAIN

MINISTER OF FINANCE

MRS MADONNA HARFORD

ACTING PRESIDENT

GRENADA TRADE UNION COUNCIL

MR. NIGEL JOHN

PRESIDENT

GRENADA CHAMBER OF INDUSTRY

AND COMMERCE