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The Turks and Caicos Islands has presented its 2015 Budget, which targets an ambitious 8.6 percent increase in tax revenue without the introduction of any new taxes.
To stimulate business activity, the Freight and Insurance Tax (FIT) has been repealed. In addition, business license fees are being slashed by an average of 50 percent from April 1, 2015, undoing a key fiscal consolidation measure that had been put in place to shore up the territory's finances.
The Government also announced that it is considering consolidating the Hotel and Tourism Tax, the Domestic Financial Services Sales Tax, Stamp Duty on Vehicle Hire, Insurance Premium Sales Tax, and Telecommunications Tax into a single general services tax. This would be achieved on a revenue-neutral basis, the Government said, to ease the administrative burden. Earlier, in talks with the UK Government, Turks and Caicos was to introduce a value-added tax, but abandoned these plans after fierce opposition from local businesses.
Other proposed tax changes include a change to the Domestic Financial Services Sales Tax (DFSST) regime. It is proposed that, from April 1, 2015, the DFSST will be imposed on outgoing money transfers only, at a rate of 12 percent. It will be removed from a wide range of fees charged by financial institutions, including for letters of credit, ATM withdrawals, late payments, and returned checks.
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