A significant political dispute has erupted in St. Vincent and the Grenadines regarding the economic impact of the nation’s inaugural VAT-Free Shopping Day. Opposition Leader Ralph Gonsalves has vehemently contested Prime Minister Godwin Friday’s declaration that the December 19, 2025 event generated EC$28 million in sales, dismissing the initiative as merely a political “gimmick” with minimal substantive benefits for working citizens.
During Monday’s 2026 Budget Address before Parliament, Prime Minister Friday, who also serves as Finance Minister, announced that the Inland Revenue Department had documented substantial consumer activity totaling EC$28 million during the tax-free shopping event. The Prime Minister characterized the initiative as “successful and well-received” while emphasizing its “tangible benefits to consumers and the wider economy.”
However, Gonsalves delivered a forceful rebuttal during his response to the Budget Speech on Tuesday, challenging the veracity of the reported figures. The Opposition Leader declared his intention to personally confront the Comptroller of Inland Revenue regarding the EC$28 million turnover claim, stating he would “contest it vehemently.” Gonsalves criticized the program’s restrictive framework, noting specific exemptions including vehicle purchases and restaurant/hotel dining that limited the initiative’s practical impact.
Employing detailed fiscal analysis, Gonsalves presented alternative calculations based on historical VAT collection data. He referenced his party’s previous administration projections of EC$159 million in VAT revenue for 2025, with actual 2024 collections reaching EC$130.2 million. Through mathematical extrapolation, Gonsalves determined that average daily turnover would approximate EC$4 million under normal circumstances—far below the government’s reported EC$28 million figure.
The Opposition Leader further questioned the methodology behind the revenue assessment, suggesting that consumer spending patterns likely shifted substantially in the days surrounding the VAT-free event rather than representing genuine economic stimulation. He cited Barbados’ experience with similar initiatives, noting that country reported losses of BDS$3 million despite having triple the population and fewer purchasing restrictions.
This fiscal debate occurs within the broader context of the New Democratic Party’s first budget presentation since ending the Unity Labour Party’s 27-year governance period on November 27. Parliament continues deliberations on the proposed EC$1.9 billion budget amid these contentious economic claims.