VZCZCXRO6195
RR RUEHGR
DE RUEHGR #0129 2622035
ZNR UUUUU ZZH
R 182035Z SEP 08
FM AMEMBASSY GRENADA
TO RUEHC/SECSTATE WASHDC 0484
INFO RUEHWN/AMEMBASSY BRIDGETOWN 0520
RUEHGR/AMEMBASSY GRENADA 0565

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