TCI politicians win VAT battle with UK

| 26/02/2013

(CNS): The UK’s overseas territories minister has given in to the pressure from elected officials in the Turks and Caicos Islands not to introduce VAT. Mark Simmonds wrote toboth Premier Dr Rufus Ewing and Opposition Leader Sharlene Cartwright-Robinson stating that he would instruct the local governor not to sign the order which would have introduce the sales tax to the territory on 1 April. However, Simmonds makes it clear that the new government will need to find the money from somewhere to produce surplus budgets and find its own way to replace the loan guarantee from the UK by 2016.

Simmonds said it was the Turks government that would be held accountable for the country’s finances and he was not about to allow a reversal of the progress made by the previous UK-led interim government. He said that to prevent that reversal the TCI government would face more difficult choices to ensure stable and sustainable revenues and expenditures in the absence of VAT.

The FCO minister told Ewing that his opposition to VAT made him responsible for the consequent decisions to ensure the fiscal health of the islands' public finances and he would be held accountable. He said that the UK still believed that without VAT the tax burden in TCI would fall on a smaller number of businesses and households and the TCI would need to take further steps to cut spending to achieve the necessary surplus budgets as agreed in the local agreement regarding fiscal responsibility.

Simmonds said the UK would be keeping a very close eye on the public purse and the UK would not accept a return to the previous dire financial situation.

The British minister also criticised the local politicians for the use of a private members bill to overturn the VAT legislation. He said that he would not allow the governor to assent to that bill but instead he would be directed not to sign the order on the VAT legislation, which would prevent the sales tax from being implemented.

He also took aim at what he described as the vitriolic public attacks in TCI recently on the judiciary and public servants and called on the premier to condemn the unacceptable level of debate.

Although an elected government has now been returned to office in TCI, the relationship between the new politicians on both sides of the Assembly and the UK government and its representatives in the jurisdiction has deteriorated.  The local government has accused the British of continuing to take a colonial approach to the territory and undermining the democratically elected officials.

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  1. UDP 'r says:

    They would have given us VAT too if McKeeva didn't open everybody's eyes to see how terrible an expat tax would be. LOL… that really sent a message to the FCO and stop them in their tracks. Vote UDP again for 2013!

  2. Jerzy Kolodziej says:


    VAT is dead. There is no set of circumstances that could ever revive it. However, democracy is barely alive. The response from the UK was ill considered and creates more problems than it solves.
    What is the legal basis for an instruction from the Secretary of State to not bring a piece of legislation (VAT Ordinance) into force. I am not aware that there is any legal basis for such an instruction. Law that has been assented to, must be brought into force with all due diligence with full regard for the will of the legislature. To do otherwise would be constitutionally impossible. If such a circumstance were to be accepted, law could be approved and assented to; but the executive or others could simply not operate the law. In such circumstances there would be little point in a legislature or Royal assent and we would be at the mercy of rule by decree. 
    The Repeal Bill was approved in the House and sent up to the Governor. The statutory options that are available to him are clear. He must either assent to the Bill or refuse to assent. There are a number of different routes in the event that he is unwilling to assent, all of these options require the matter to be referred to the Secretary of State for a decision.
    It appears from the evidence that the matter has indeed been referred to the Secretary of State but the basis of that referral is unclear.
    Faced with a decision under the statutory framework the Minister has two options; either an instruction to refuse assent or an instruction to assent.
    There is no possible option to decide not to make a decision and circumvent the due process by instructing the Governor to indefinitely delay assent. If the Minister has instructed the Governor not to assent to the Repeal Bill this decision must be clear and transparent. If the Minister has not instructed him to withhold assent, the Governor must assent to the repeal without further delay. 
    We are entitled to expect the "rule of law" in the TCI. This procedure is clearly unlawful and unconstitutional. On a practical level we are entitled to have certainty and closure in this matter… any uncertainty is not in the public interest and damaging to our economic interests.
    The scandalous decision to continue down this path serves no other purpose than loss of time. The Governor's statements and radio commentary were typically ill judged and lacking in any grace. I urge that there is an immediate reconsideration of the UK and Governor's position to avert any further controversy. 
  3. Anonymous says:

    What a mess the UK's Foreign Office has put this island in. Think of the people there.. what they have to do through with government policies. I wonder if they did a poll on the confidence level the people have for the government. That would be interesting. True democracy cries at the door.

  4. Anonymous says:

    In my view, the previous set of politicans should have been banned from ever running again.  They are back to politics as usual and true to form, they are heading right back to what got them in the mess in the first instance.  Some people just don't learn; like Cayman with the UDP.

    • Whodatis says:

      Or like the UK with the Labour … and the Tories … and the Liberal Democrats?

      Look at the mess that country is in right now.

      They have absolutely no basis for advising another on good governance and fiscal responsibility.

      For goodness sake, their PM just went on a trade jaunt to the "3rd world" and the only thing he had to bring to the table was weapons!

      Are we understanding the significance of this fact?

      An absolute joke of hypocrisy is the UK today.


  5. bradley says:

    Clear evidence that the FCO don't know what they are doing. Wavering at the last minute and changing their minds, just shows they are not experts at running economies. Leave that to a democratic elected people!

  6. Anonymous says:

    For Heaven's sake, Britain, cut them loose and let them mash themselves up in their own corrupt ways.