Turks tries to wiggle out of VAT

The United Kingdom’s Overseas Territories Minister has left open the possibility that the Turks and Caicos Islands may be able to get out of implementing a value-added tax, if the territory’s governor agrees to go along.

The VAT bill was signed into law in July and is due to come into force on 1 April for the Eastern Caribbean territory.

However, in response to a parliamentary question asked by Labour Party Member of Parliament Brian Donohoe, Overseas Territories Minister Mark Simmonds indicated the matter is up to the Turks government.

“The introduction of value-added tax is a decision for the Turks and Caicos Islands government,” Mr. Simmonds said.

Minister Simmonds’ response comes just after the territory’s Progressive National Party was elected to the government. The UK had enacted direct rule in the Turks and Caicos Islands during 2009 following a massive corruption scandal that ended in more than a dozen people facing criminal charges.

According to the Turks and Caicos Independent Business Council: “At first glance, we welcome the minister’s statement as the PNP support the abolition of [value-added tax]. However, we are fairly certain that the governor can and will override this, which doesn’t say a lot for democratic government in these islands.

“It also leaves Mr. Simmonds in a delicate position and we trust he understands the importance of his answer to Mr. Donohoe and the importance of giving such an answer to The House of Commons.”

A business council spokesman continued: “On the surface, Mr. Simmonds appears to be supportive of the Turks and Caicos Islands, but the question remains whether the governor and [Foreign and Commonwealth Office] reflect his views. The real test will come when, and if, the new government attempts to abolish VAT and the governor overrules them.”

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