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BVI Clocks Up 11% Growth In 2006

by Leroy Baker, Tax-News.com, New York

15 June 2007

Giving his fourth annual State of the Territory address earlier this month, the BVI's Chief Minister Dr D Orlando Smith said that the BVI posted growth of 11% in 2006, registering GDP of US$992m.

Dr Smith said that tourism remains strong, with an increase in the number of cruise visitors. In 2006, average expenditure per visitor increased by 15%, suggesting that the BVI's strategy of focusing on high-end visitors is paying off. He noted that the work of building the first new resort developments that the BVI has seen in a generation had begun.

Infrastructure investment during the past few years had included new water treatment plants, new and reconstructed roads, substantial progress toward new docks on Anegada, Jost Van Dyke, as well as Trellis Bay and Cane Garden Bay, and runway improvements at Beef Island and the Auguste George International Airport on Anegada.

The Minister recalled that the government had established a fairer tax system, removing the 'ring-fencing' of local businesses, and moving to a payroll tax system.

'Under the old system,' he said, 'we all know that some people often did not pay taxes on their salaries and other benefits, nor did some companies pay taxes. Under the new payroll system, these taxes are now collected. Moreover, under the new payroll tax, the tax burden on working families was substantially reduced from the old income tax system – meaning that you get to keep more of the money you earn to spend as you see fit.'

Over the past two years, said Dr Smith, the government had completed the first phase of the new Hospital project with the opening of the new Annex, and was moving forward to construct the new 128-bed Hospital building. 'Once completed,' said the Minister, 'the new Hospital will provide a level of service previously unknown in the BVI. And we have also begun the historic work of establishing a National Health Insurance Programme.'

Dr Smith reported on the negotiations with the UK over a new constitution: 'It was one of the great honours of my life to lead the BVI delegation composed of members of Government and Opposition, as well as the esteemed leaders of the BVI Constitutional Review Commission. And I can tell you honestly that it was only thanks to the strength that we were able to draw from the people’s support that we were able to stand firm at every step in the negotiation. Every time the UK team wanted us to concede on a critical point, even when they were supported by members of our team – we recalled that we were acting upon the express will of the people of the BVI – and our spirits were strengthened, our backs were stiffened, and our heels dug in. We now have a new Constitution for the BVI that is the pride of our community and the envy of our region.' The Minister listed key aspects of the new constitution:

  • A National Security Council to promote public safety;
  • A cabinet system to ensure that the elected leaders of the Territory can advance the public’s agenda;
  • New protections to ensure that children born to BVI parents outside the BVI will be Belongers and enjoy the full rights and privileges Belonger status provides;
  • A human rights chapter that forever preserves the core liberties of the people;
  • The authority in areas of external affairs to negotiate;
  • A new distribution of power between the BVI and the UK that gives the BVI new authority to control its own destiny while maintaining the benefits that come from being an Overseas Territory of the United Kingdom.

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