CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. UK Urged To Heed Turks And Caicos VAT Opposition

UK Urged To Heed Turks And Caicos VAT Opposition

by Amanda Banks, Tax-News.com, London

28 September 2012


The Turks and Caicos Independent Business Council (TBIC) has called for the UK government to allow the next incoming local government to decide whether to introduce a value-added tax (VAT), contending that the regime is being introduced in the teeth of opposition from the local business community and the islands' political parties.

VAT is said to be being "forced through" by the interim government, at the behest of the UK government. The interim government was installed on August 14, 2009, when the UK government - acting on corruption concerns - assumed control of the territory's affairs, removing its elected premier, cabinet and assembly and suspending much of its constitution. Following three years of reforms, namely to improve the islands' finances and to introduce safeguards to ensure sound fiscal management and good governance going forward, the UK government has agreed that the islands can be returned to self-rule in elections due to be held on November 9, 2012.

However, despite the interim government making substantial progress towards the islands achieving recurring budget surpluses, the TCIBC contends that the UK government is failing to listen to local arguments that a VAT is inappropriate for the Turks and Caicos Islands (TCI). It said it had received support from all the political parties, who it said are "united in their emphatic opposition to the way VAT has been handled by the Interim Administration".

The Council stated:

"Despite documented, widespread opposition from soon-to-be elected political leaders, all sectors of the business community and thousands of citizens, the government still refuses to provide any real, hard evidence or analysis showing how VAT will work in the TCI."

"We fully agree that VAT can work in a country that already has the necessary requirements for its administration and a broad-based economy that would benefit from lower import duties." However, "the current misconceived plans to introduce a VAT into a small, single income (tourism) economy is a disaster in the making, one that could come back to haunt the Foreign and Commonwealth Office and the Department for International Development in years to come."

"We find it reckless that the [UK] Foreign and Commonwealth Office and the Department for International Development are permitting such a wholesale change to the revenue system in Turks and Caicos without proper analysis and explanation."

"VAT is expensive to implement, expensive to collect and burdensome on businesses - especially smaller ones. Significant changes in taxation policy are the remit of elected representatives who must then 'live by' those decisions and who are answerable to voters and members of their community. These are the sort of decisions that should be made by an elected government."

"The Interim Administration has already deferred significant amendments of the Planning Regulations to the soon-to-be- elected government. Surely a matter so central to the future well-being of the country is also a matter that should be deferred. Now that the British government has agreed to return power to a local government in just six weeks' time, it is only appropriate that they should be trusted to decide how the TCI is to raise its own revenues."

An 11% VAT regime is set to be introduced from April 1, 2013. VAT will replace Communications Tax, Hotel & Restaurant Accommodation Tax, Vehicle Hire Stamp Duty, Insurance Premium Tax and the Domestic Financial Service Tax. When VAT is implemented, Customs Import Duty will generally be reduced by 10% to 15%.

TAGS: tax | business | value added tax (VAT) | fiscal policy | international financial centres (IFC) | budget | Turks and Caicos Islands | offshore

To see today's news, click here.

Leave a comment

Read our Posting Guidelines

 






Close

Password Reminder

Please enter your email address to receive a password reminder.

 






Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Tax-News+ Updates

Receive FREE daily updates from Tax-News.com, straight to your inbox. Register Now!

For a tailored solution, choose to receive selected news updates for your preferred jurisdictions and topics, with our enhanced Tax-News+ subscriber service. Read more...

 

Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »