fp Turks and Caicos

Turks and Caicos Independent Business Council Chairman Clive Stanbrook says the group is appalled at the gross inaccuracies and wildly misleading information in government press statements on proposed value-added taxes.

“There were no consultations as to whether VAT should be implemented and certainly nothing that could be said to comply with the British Government’s own guidelines for consultations,” Stanbrook said.

“Even where there were consultations on the implementation, the questions posed by some of the groups were not answered properly or at all.

“The accepted rules of governance have been ignored. The consultative bodies that they themselves have 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.”

TCIBC responded to several statements (government statements in italics).

The proposed Legislation will mirror those crucial decisions of the White Paper. It will first be released as a draft to Advisory Council and Consultative Forum members on 2 July and passed into Law on 13 July 2012, albeit it will not come into force until VAT Implementation date, April 1st 2013.
The VAT White Paper cannot possibly be properly debated by the council or forum in less than two weeks. This short time frame indicates that the interim government means to ram this through regardless of the cost or opposition. It appears that Britain has decided to listen to the wishes of the European Union rather than to the experienced voices of the residents and businesses in these islands.

The VAT Implementation Team will then begin its public education campaign after it passes into law, including advisory visits will be conducted with proposed registered businesses, to provide extensive education, technical assistance as needed and advise them of their obligations under the proposed legislation.

This is too little, too late and will impose too high a cost on our struggling economy. One need only consult with any other Eastern Caribbean island where VAT has been imposed to discover that it has had unacceptable negative consequences. Barbados is practically bankrupt because of outstanding VAT receivables. The construction industry in St. Kitts has been decimated by a 15-20 percent increase on all construction. The evidence is loud and clear, yet the interim government remains deaf to it.

The consultation involved a total of 14 public meetings, and 16 focus groups meetings across the islands. During this time the VAT implementation team was also engaged in answering and addressing questions and concerns in relation to the issues for consultation, via e-mail and through the publication of a series of questions and answers.

These were never meetings nor consultations, but rather propaganda exercises designed to provide cover for (governor’s spokesman) Mr. (Neil) Smith’s press releases. The chief financial officer and members of the VAT team could not or would not answer simple questions and repeatedly demonstrated a complete lack of understanding of the challenges faced by businesses here.

In one of the more striking shows of ignorance, not one member of the VAT team understood the fundamental corporate structure upon which our entire real estate industry is based: the strata corporation. In another instance, the VAT team had completely failed to contemplate how VAT would affect TCI companies that had been issued a 20-year tax exempt certificate.