A bill that will implement a value-added tax in the Turks and Caicos Islands was signed Thursday by the British Overseas Territory’s acting governor.
A statement from Caribbean territory governor Ric Todd’s office indicated the signing follows a “consultative forum” held earlier in the month where “notably, no one voted against the bill”. There were five members of the forum voting for the bill and five members abstaining.
The value-added tax will be in place in the Turks and Caicos from 1 April, according to the governor’s office.
The United Kingdom-led interim government of the Turks and Caicos Islands has agreed that a wide range of items will be exempt from the value-added tax or have a zero-based rate, including fruit and vegetables, fresh meats, hurricane supplies, leases, rents and water and electricity bills.
The tax exemption will also be extended to gasoline, propane and other fuels; bulk building materials; and any other items that are identified in the eight weeks before regulations for the tax law are finalised.
“I hope that everyone who took part in this debate can put their difference of opinion behind them to help make the implementation of [value-added tax] as successful as possible,” said Acting Governor Patrick Boyle. “VAT implementation here is about providing our essential public services with a more predictable, regular and stable cash flow.
“The forum made clear that they would like to see more examples of how VAT will affect the man or woman in the street and smaller businesses, as part of a wider education programme. We accept, too, that the VAT debate so far ended up being above their heads between government and TCI’s bigger businesses. We are working on this now.”
Businesses in the Turks and Caicos Islands have been in revolt over a UK-backed plan to implement the value-added tax for the territory. The UK took over direct rule of the territory following a corruption scandal that led to the deposing of former Premier Michael Misick and criminal charges against a number of island residents.
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.
“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.”