November elections date set
The British provisional government in the Turks and Caicos Islands has backed the introduction of a value-added tax, or VAT, similar to a sales tax to support the Caribbean island chain’s sagging public finances.
Governor Ric Todd’s office released a statement Monday as part of an ongoing debate over the issue.
“[Value-added tax] is a proven system across the Caribbean,” said Turks Chief Financial Officer Hugh McGarel-Groves. “It is straightforward to administer and is beneficial here in that this single form of taxation replaces five different sets of ordinances that both government and business need to keep abreast of.
“As the community of the TCI continues to discuss the implementation of VAT, critical questions must continue to be asked of both of the government but also of the anti-VAT campaigners: what are their alternatives to the benefits of VAT to a renewed TCI; is opposition to VAT borne from a desire to continue not to pay tax at all in some business sectors?”
Value-added tax is a form of consumption tax. From the perspective of the buyer, it is a tax on the purchase price. From that of the seller, it is a tax only on the value added to a product, material or service. The manufacturer remits to the government the difference between these two amounts, and retains the rest for themselves to offset the taxes they had previously paid.
The United Kingdom government has argued that implementation of more measurable taxation schemes throughout the overseas territories to protect the smaller entities from fluctuations in unpredictable industries such as tourism and duty levied on imports.
Concerns have been expressed by residents campaigning against the VAT in Turks that such a charge will make the destination less competitive as a tourism destination.
The provisional government has argued that this is simply not true.
“The proposed rate of VAT will be between 8.5 per cent and 12 per cent,” according to information released by Governor Todd’s office. “Of the 12 Caribbean countries that have introduced a VAT, only the Dominican Republic and Haiti have rates below 12 per cent. The majority of others have set rates between 15 and 17.5 per cent.”
UK officials have noted that preparations for the VAT in Turks were announced in April 2011 – ahead of the planned implementation schedule set for April 2013.
“The introduction of VAT has been considered for TCI since at least 2005,” the governor’s office information indicated.
As proposed, the Turks and Caicos value-added tax would replace several taxation laws that exist, including the hotel and restaurant accommodation tax, the vehicle hire stamp duty, the domestic financial service tax, the telecommunications tax and the insurance premium tax.
“VAT will also partly replace import duty and thereby start reducing the excessive, unnecessary and unfair benefits some businesses receive via import duty concessions,” the governor’s office information read. “VAT … will spread the burden across a larger portion of the economy.”
9 November election
UK Foreign and Commonwealth Office Secretary of State William Hague announced Tuesday that a 9 November date would be set for new elections in the Turks and Caicos.
Britain has initiated direct rule in the territory since the ouster of former Premier Michael Misick’s government and the findings of a Commission of Inquiry that revealed a “high probability of systemic corruption” within Turks.
“We now judge there has been sufficient progress … to set a 9 November date for elections,” Mr. Hague’s statement read.