War of words heats up over VAT in TCI

| 03/07/2012

hugh.jpg(CNS): Following accusations by the newly formed Turks and Caicos Independent Business Council (TCIBC) that the territory's governor’s office has circulated “gross inaccuracies and wildly misleading information” in connection with the proposed introduction of VAT, Hugh McGarel-GrovesChief Financial Officer  said as business people the council should understand the importance of stable cash flow. TCIBC Chairman, Clive Stanbrook, QC said that there had been no consultations over the implementation of VAT and questions had not been properly addressed. “The accepted rules of governance have been ignored,” Stanbrook said last week.

“The consultative bodies that they themselveshave set up have been treated as a mere rubber stamp. They have been given less than two weeks to consider and assess complex legislation of a type that will have a profound impact on the economy of the Islands.

“To make matters worse, in this crucial period the Governor is taking a holiday. The Interim Government's claim to have consulted the people of the Turks and Caicos is a complete sham and provides no respectability for rushing through important legislation for the restructuring of taxation in the TCI against the wishes of almost everyone in the community," the chair of the body campaigning against VAT stated.

Meanwhile, on Tuesday McGarel-Groves said the IBC seemed to be set against people benefitting from “planned, sustained and regularised income” which would enable government to invest in, essential public services.

“Government revenue has fluctuated wildly over the past few years. VAT helps prevent this. What do we do if revenue drops again without VAT – close schools?  More than anyone else, business people should understand the importance of stable cash flow.”

The UK official said the group was presenting a “partial picture of what has gone on in other Caribbean countries,” particularly Barbados where the challenges of that country are not as implied by IBC solely down to VAT.

“VAT was introduced in Barbados in 1997 and the country enjoyed a number of boom years immediately afterwards,” said McGarel-Groves who is behind the drive to implement VAT in TCI. “The IBC claims ignore wider economic issues and do not take into account that both income and property taxes are payable there, and elsewhere in the Caribbean, in addition to VAT. That TCI has neither of those taxes here, and has proposed the second lowest rate and the highest VAT threshold in the Caribbean, we believe offers the country an ongoing significant competitive advantage.”

The UK public finance officials said it was not true that the government had failed to consult the people and the issue has been up for discussion since 2005.

“The Green Paper – intended to generate discussion before decisions were made – was distributed widely to the Advisory Council, Consultative Forum, numerous business Associations, individual businesses and members of the public. We held more than 30 sessions with various groups. The accusation that we could not provide all of the answers is also misleading as many of these answers could only be provided after consultation in the White Paper, such as dealing with Strata corporations, which is the factual statement of Government policy and published today,” he said.

McGarel-Groves claimed that the white paper published Tuesday shows local considerations have been taken into account. “VAT is a replacement tax, prices should not rise; we have made a large number of items zero rated or exempt from VAT to help both the consumer and the construction sector, for example; we have carefully considered how to implement VAT and to ensure effective compliance,” he added.

The Turks and Caicos Independent Business Council (TCIBC) began a full scale campaign against the proposed VAT last month which they say is inappropriate for the islands’ economy. It has accused the British bureaucrats of imposing a cookie cutter, tax system that won’t work in the Caribbean territory. Some 3000 people have already signed a petition and the TCIBC believe the UK cannot impose a tax that will be rejected by the community.

 

Category: World News

Comments (11)

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  1. Angel of truth says:

    Sometimes the lesser evil may not be from your house, so be it. 

  2. Whodatis says:

    Stories like this ought to be dominating the discussion within Cayman today. Reason being for with this context and understanding all else becomes much clearer.

    While many are content to argue over UDP vs. PPM … McKeeva vs. Alden … or OMOV vs. the standing system – they are missing what is perhaps the most crucial and relevant issues of all … our complete lack of democracy coupled with the heinous and despicable actions of the powers that be.

    Wake up, Cayman lest you be awaken by you-know-who. I guarantee you, if so be the case it will already be too late.

  3. Dennie Warren Jr. says:

    This is an interesting day to be discussing British taxation in a British colony. I wonder what advice would Prime Minister Charles Townshend would offer the imperialist in TCI today?

  4. Tasia says:
    wow, this made me very upset!
  5. JD says:

    People learn well. This is your FCO Administration power that you brag so much on how you are so proud of being British. Learn well Cayman, be very wary, because you see how they are treating them up there, don't for once think that they will not do it to you. These guys are blinded by their power and ego. They listen to no one unless you are on their side. Look how they talk down to a group of prominent business owners in TCI.

    See or copy and paste link –  http://wivtc.com/portal/?p=16493

     

    • Born Caymanian. says:

      Interesting how many foolishly are in favor of full British Rule and want us to jump from McKeeva's frying pan to the UK's boiling pot!  I personally don't know which dictator is worse for us. All I know is that we need to seriously educate ourselves and start planning for the future because it looks very bleak

      • lesser of the evils says:

        I have been here for many years, married to a Caymanian, and active in the community.  I want to see honest goverment, period.  Accountability, less spending and good governance is what we need.  If it is the UK and we have old fashioned Custos and Accountants minding the cash, I'll be happy.

        Clearly our local Cayman politicians have failed us.  They have filled their pockets, used every tactic of crony capitalism, and now make us fear any other form of government.

        Sorry, but the UDP and PPM years of wasting our money, killing our economy, driving away tourism and ignoring every enviromental concern must end.

        Education is the key (not new schools, but smart kids) the only thing that will save Cayman is a generation better than this one.

        • Anonymous says:

          And… so…

          you have not made any sense nor proven your point in favor of the britz

          • Dennie Warren Jr. says:

            Amen!

            • Born Caymanian.. says:

              I wont be surprise that the "lesser of evil" commenter is from the labor camp. The aim is to keep Caymanians into thier little box whilst they play political games.

        • Anonymous says:

          I don't care if you lived here for a number of years and have married a Caymanian, the UK and Accountability don't mix. I have been to the UK and know what is going on in their Parliament, and I can tell you mister, you want to know where corruption is…  I better hold my tongue, because I am done with the MP list of scandals you will have to room for your response