Published in TCI News Now on 26th of February 2013
VAT implementation frozen
Britain’s Overseas Territories Minister Mark Simmonds wrote to Premier Rufus Ewing on Monday accepting the TCI government’s proposal not to implement value added tax (VAT) on April 1, 2013.
Britain’s minister for the Overseas Territories, Mark Simmonds
Simmonds said that Governor Ric Todd will not give his assent to the Private Member’s Bill to repeal VAT introduced by Sharlene Cartwright-Robinson, opposition leader and leader of the Peoples Democratic Movement (PDM).
At the same time, the governor will not sign the commencement notice that would have brought VAT into effect on April 1.
Simmonds went on to issue a strongly worded warning in his letter to Ewing that he cannot and will not allow a reversal of the financial progress achieved by the interim government.
Although the VAT Repeal Bill was passed by the House of Assembly with only the two governor’s appointed members voting against it, a more cogent reason for the freeze on VAT may be the revelations during a recent Appropriations Committee meeting, also chaired by Cartwright-Robinson, which indicated chief financial officer (CFO) Hugh McGarel-Groves and his VAT team were nowhere near prepared for the implementation of the new tax.
It was revealed at the meeting that McGarel-Groves had not yet purchased the software required to operate the complicated tax plan.
Businesses covered by VAT must pay the full tax and then apply for a credit against future taxes by submitting elaborate tabulations of each and every item imported and import duty tax paid.
It became clear as Cartwright-Robinson and other members of the committee questioned the CFO that neither he nor the permanent secretary of finance had studied the issue adequately and was unable to estimate what revenue VAT would raise.
Also revealed was that local businesses had not signed up for VAT. In fact, the Chamber of Commerce itself had come out against VAT.
In related news, Ewing appeared on local television trying to assume credit for the freeze on the new VAT. He said he wanted both the motion and a repeal bill but, after listening to Cartwright-Robinson’s arguments, agreed with her planned course of action.
Ewing on two previous occasions had asked for a delay of VAT and was twice refused.
He said that, if Cartwright-Robinson’s motion and the overwhelming support of the Assembly had not resulted in stopping VAT, he was ready to call for demonstrations.
TCI News Now spoke to Cartwright-Robinson as Ewing’s interview ended and she said it was clear that this has been a PDM issue and that Ewing had tried twice and been refused.
“We have been on record against VAT since early last year and it was our actions in the Appropriations Committee meeting that revealed that VAT had not been considered carefully,” Robinson said.