Anguilla Resents Rising Tax Burden

by Amanda Banks, Tax-News.com, London

11 October 2011

In meetings with the government, Anguilla's hospitality industry has sucessfully won government support for abandoning a 10% tax on restaurant bills and car rentals, previously agreed by Anguillan authorities and the UK government as part of efforts to tackle the territory's deficit.

Warning of the impact that the tax could have on Anguillan businesses, Alan Gumbs, representing the Anguilla Hotel and Tourism Association, said that the industry would "not accept another tax", and also called for the removal of the stabilization levy. Noting that the tax burden had already significantly increased on Anguillans, he noted the detrimental impact the new levy would have on the economy and government revenues.

Businessowners called on the government to rethink its strategy and focus efforts on marketing the island internationally.

In response, Chief Minister Hubert Hughes spoke frankly about the burden that the United Kingdom has placed on the territory during discussions on fiscal policy, which he said has impeded Anguilla in exercising its fiscal sovereignty.

He said his government would not support the 10% tax but said that the removal of the stabilization levy would require approval from the UK government. The stabilization levy - introduced and later amended in the revised version of the latest budget, imposes a temporary 3% tax on wages, matched by a 3% tax rate payable by employers. A 6% stabilisation levy applies to the earnings of the self-employed.

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