The Tribune

By AVA TURNQUEST

Tribune Staff Reporter

aturnquest@tribunemedia.net

THE TURKS and Caicos rejected Value Added Tax proposals because of its projected impact on the cost of living, according to a government minister.

Akierra Missick, Minister with responsibility for Ministry of Education, Youth, Sport and Culture in the Turks and Caicos, said it was decided that the tax was not the best way forward given the country’s model as a consumer-based society – a characterisation she said that was similar to the Bahamas.

Ms Missick said: “Verily in all of the halls on the government side is that value added tax is not the best way forward for the Turks and Caicos. We are not producers, we are consumers, we are not adding value to anything, so we’re having an extra 12 per cent on top of the already high customs import duties – which again the Bahamas experiences as well.

She added: “We felt that the cost of living would increase significantly with VAT versus a payroll tax which was estimated to be at 1.5 per cent.”

Ms Missick said the tax was a very hot topic during her party’s election campaign in an interview with The Tribune last week.

The governing Progressive National Party is pushing consultation on two tax reforms, payroll and property tax, according to Ms Missick, who admitted that support for new taxes has not been widespread.

“What we need to have in the Turks and Caicos is to have a sustainable tax revenue structure in order to provide the services that are on demand,” she said, “but also that we need to provide as a government. So we’ve expressed that the payroll tax would be the most feasible, and the best structure moving forward in a system of compliance. 

Ms Missick added: “We have also introduced the possibility of a property levy, also known as a property tax, but that hasn’t received the support either. The government is more minded to move forward with payroll tax.”

Ms Missick’s comments were made as New Zealand VAT experts begin the process of advising the Bahamas government on its readiness for the tax.

The VAT experts emphasised that a strong education campaign and “virtually no exemptions” are responsible for their country’s successful implementation of VAT.

The campaign was said to be an 18-month educational programme, six months of which was prior to the implementation date.

At the media briefing last week, experts John Shewan and Don Brash explained that the passing of a Freedom of Information Act and a Fiscal Responsibility Act were important in establishing trust in New Zealand residents over their government’s efforts to implement Value Added Tax (VAT) and other fiscal reform initiatives.