Turks business council blasts value added tax

Businesses in the Turks and Caicos Islands are in revolt over a United Kingdom-backed plan to implement a value added tax for the territory.  

A value added tax, similar to a sales tax, has been proposed to come into effect later this year.  

The Turks and Caicos Independent Business Council was formed recently by a broad group of individuals from all sectors of the economy and business community, according to a statement sent out by the group this week.  

“We have a common purpose in that we are all unified in our opposition to the introduction of VAT in the Turks and Caicos Islands,” a group spokesperson said. “We send a clear warning to [UK] Chancellor [of the Exchequer] George Osborne that we represent the interests of all the leading businesses in the country and indeed it can be said that our views are representative of virtually every business concern.  

“We are deeply concerned about the expected negative effects of the hasty introduction of VAT into the islands’ tax structure. As business professionals we do not have a problem with taxation and recognise the need to fund government. 

“However, we do have a major problem with this particular type of tax and its inappropriate nature for these specific islands and our unique economy at this time and at this specific point in its young development. We believe that the recent gains in economic sustainability will be lost with the imposition of this ‘boiler plate’, cookie cutter, tax system. 

“This new VAT tax is not driven by a ‘grass roots’ initiative, but is a politically driven tax imposed upon us by distant bureaucrats based in Europe without effective due process and regard to our specific economy and its future development. One size does not fit all,” the statement continued. 

According to the group, a petition with more than 3,000 signatures has been gathered in opposition to the implementation of the value-added tax, or VAT. 

“This is not a done deal as many think,” the statement added. “No government or administration can impose any policy upon a community if that community refuses to accept the policy. 

“It is the view of virtually the entire business community in the Turks and Caicos that a VAT tax is inappropriate, costly, cumbersome and unnecessary at this stage in the development of these Islands,” said group chairman Clive Stanbrook. “In the short term, it is clear that the existing taxation systems can be relied upon to raise such extra revenue as may be needed.” 

Earlier this month, Turks and Caicos Governor Ric Todd’s office released a statement 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 UK 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. 

TurksCaicos

Businesses in the Turks and Caicos Islands are in revolt over a United Kingdom-backed plan to implement a value added tax for the territory. – Photo: File
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4 COMMENTS

  1. I’m still a bit puzzled as to why Caycompass did not permit my last comments to Old Hand on another topic that is indirectly related to this issue…and my direct reference to the imposition of VAT in the TCI.

    Was it because it questioned the British FCOs integrity in their dealing with Britain’s BOTs..or mentioned their hypocrisy in some of their statements and actions ?

    One thing that any knowledgeable student of British colonial history would be aware of is the time-proven tactics of British colonial administrators to use flowery, high-minded and sounding terms and ideals…while their actions prove something totally different.

    The people of TCI are now finding this out for themselves…

    The people of Cayman need to be very careful that they are not soon to follow.

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  2. Jersey threatens UK split over tax scrutiny: report

    The Channel Island of Jersey could consider independence from Britain due to a clampdown on its financial industry, a senior island minister warned in comments published in Wednesday’s Guardian.

    The island fears that the British government is moving to end to its low-tax status, and is now threatening to bring 900 years of association with the British Crown to a close.

    I feel that we get a raw deal, Philip Bailhache, the island’s assistant chief minister, told the Guardian newspaper.

    I feel it’s not fair — I think that the duty of Jersey politicians now is to try to explain what the island is doing and not to take things lying down, he added.

    The island should be prepared to stand up for itself and should be ready to become independent if it were necessary in Jersey’s interest to do so.

    Britons are increasingly angered by revelations of tax-avoidance schemes as they grapple with recession and an unsustainable public deficit.
    http://uk.finance.yahoo.com/news/jersey-threatens-uk-split-over-012357207.html

    To the readers/members of Caycompass’s forum…

    My purpose and opinions on these related topics is not to spread panic or dissession within the relationship between the British FCO and Cayman but…

    To bring knowledge and information to Cayman’s readers of what else is going on that is very relevant to Cayman that…

    The British authorities are not telling you.

    As I’ve already mentoined, the City of London is a tax haven in its own right that is in direct competition with Britains’ offshore low-tax territories, of which Cayman and Jersey are two.

    As this article shows, Jersey has cause to be worried…

    So should Cayman.

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  3. Firery: still wanting it all ways, man. In the vernacular-drop it or get off the pot. The UK will, I should think, not unhappily hand over and leave you to run your own show.

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  4. British recession deeper than previously thought

    Britain’s recession is deeper than thought as official data on Thursday shows the economy shrank 0.3 percent in the first quarter following a higher-than-expected 0.4-percent contraction in late 2011.

    The Office for National Statistics said in a statement that British gross domestic product (GDP) shrank 0.3 percent between January and March compared with the final quarter of last year — confirming its previous reading.

    But it revised its data for the fourth quarter of 2011, stating that GDP contracted by 0.4 percent between October and December, worse than a previous estimate of minus 0.3 percent.

    A recession is defined as two quarters running of contraction.
    http://uk.finance.yahoo.com/news/british-recession-deeper-previously-thought-103737552.html

    Old Hand…

    You’re missing my point, mate.

    I live in Britain, not Cayman…

    And this is the situation in Britain, not my opinion but reported facts, as if those of us who live here need any independent proof.

    VAT(Value Added Tax)imposed in the TCI, Jersey threatening independence if the British Govt. threatens their low-tax status, Cayman being squeezed by budgetary and borrowing restrictions…all by a country that is in one of the most unholy economic messes in the industrialised world ?

    Wake up and smell the coffee, man !

    No one is saying that Britain does not need to keep the public spending/debt in Cayman down, seeing that the local govts are completely useless…but..

    Don’t rule out the common sense factor of the proof of the British Govt calling its colonial governments fiscally incompetent…a case of the pot cursing the kettle…

    When the British Govt is in a worse position at home, than they are.

    Check out the facts for yourself; don’t believe eveything that they tell you.

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