Grenada Government Says GRENLEC Benefitted Most From Tax Concessions

ST. GEORGE’S, Grenada CMC – The Grenada government says the decision to reduce concessions to several companies is aimed at improving revenue collection with the “most profitable companies”.

“The additional revenue will help close government’s monthly fiscal gap. Most importantly, closing this gap will trigger the release of approximately EC$90 million (One EC dollar = US$0.37 cents) per year from development partners that will allow for the provision of vital services as health and education as well as financing of Government’s capital development programme.”

Last week, the Grenada Electricity Company (GRENLEC) warned that customers could be adversely affected by the decision of the government to significantly reduce its concessions to the privately owned utility company.

Last December, Parliament approved the 50 per cent reduction in concession for the lone electricity supplier by amending the Electricity Supply Act.

The amended legislation mandates the company to pay 50 per cent of “all Customs and other import duties and landing tax on all plant, machinery, equipment, meters, instruments vehicles, fuel, lubricants and materials (including replacement parts and spares) imported by the company’, among other adjustments”.

But in a statement, GRENLEC said it was concerned at the impact the amendment would have on its operation and rates.

GRENLEC’s chief executive officer, Clive Hosten, said that the company only received notification about the amendment in mid January, and suggested that it would result in an additional increase to customers in both the non fuel and fuel charges.

GRENLEC had earlier this year announced that as of this month, customers would be paying an increase in non fuel charges. Government has since said that it’s not in support of the increase.

Hosten said that the principal act had exempted GRENLEC from these duties and, as a result, enabled the company to keep its rates at the lowest possible level.

But the Keith Mitchell government in a statement said that based on the government’s assessment of concessions given for 2013, “GRENLEC once again topped the list of exemptions at the Customs and Excise Division, with exemptions totaling EC$31.8 million.

“It should be noted that these exemptions refer only to Customs and Excise.  They do not include exemptions from Inland Revenue.

“Government has already taken action to reduce the concessions given to GRENLEC and will be proceeding to do same with other companies and organisations,” the statement said.

The statement noted that apart from GRENLEC, the tourism sector benefitted from EC$28.4 million in concessions, manufacturing EC$9.7 million, St. George’s University EC$5.8 million, statutory bodies EC$3.4 million, construction sector EC$3.3 million and returning nationals EC$3.3 million.