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Commentary: VAT made clear
Published on January 21, 2013 Email To Friend    Print Version

By David Tapfer

Reading the letter from the Minister of Overseas Territories makes clear at its outset why the Turks and Caicos Islands are facing the implementation of VAT. In fact this information comes on the heels of what was already said by the CFO in the first meeting of the Appropriations Committee on Monday last.

tapfer.jpg
David Tapfer is a retired, US-born engineer and management executive. He is the former chairman of the Middle Caicos Branch of the Peoples Democratic Movement
The value added tax is considered a necessary measure by the Foreign and Commonwealth Office (FCO) as long as Britain has to guarantee the loan taken out to pay the bills accumulated by the last elected government. One led by the Progressive National Party (PNP).

There are two other interesting points in the minister’s letter. One is that VAT was being considered as the appropriate tax by the PNP government led by then finance minister Floyd Hall. According to the letter, the alternative to VAT was then and would be property and income taxes. Both would spell the end of the TCI as we know it today. That will never happen.

However, on a number of occasions, I have reminded the public that these two taxes were being considered by Minister Hall as he addressed the nation from the floor of the House of Assembly during the last budget session in April 2009. Now Hall has come out to remind the public that this was one of four tax plans his government planned to impose on the public. Another was VAT and a third was sales taxes. The fourth plan is unknown.

The bottom line on the woes of the TCI today is due exclusively to the antics of the longest lasting PNP government. That is the legacy Premier Ewing and Minister Misick have inherited. Fact is, having Washington Misick as the finance minister is in my opinion the final straw. He managed the “peoples” TCI Bank, which not only wasted, in three short years, the deposits of 4,000 families but most of $23.5 million of the workers’ pension fund invested in the minister’s bank by the now PNP national chairman. Now Washington says his alternate taxes will grow the TCI economy.

What he really meant was the alternate taxes might grow the government’s income, not the economy. Taxes always damage the economy. How a minority of voters in TCI were able to pull off the debacle of re-electing the PNP is now instant legend.

In God’s world we all get a second, third and even more chances to correct our mistakes. The court in the Cheshire Hall case may give us the first crack at a second chance and there seems to be several more in the offing. The rush to the election gave a rush to judgment. In the rush were mistakes on both sides of the political spectrum. The Peoples Democratic Movement (PDM) quickly fixed theirs on 15th December last.

Now we have a medical doctor for a premier who assigned his one area of expertise -- health care -- to a minister who needs a salary of more than 11 grand per month. Perhaps the doctor is well aware that he lacks in administrative skills what he knows as a diagnostician and surgeon. NHIP has already proven that fact. The question of course is what skills does this Misick minister have?

The error of our ways and the errors of the election chiefs have given us the current mess. Now VAT is on the way and unstoppable. In a year or two the country will know how well VAT worked. If it was a mistake, the government led by the PDM will repeal it and go on as before to really fix the economy of the TCI.
 
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