The VAT Bill passed its reading with the Turks and Caicos Islands Advisory Council at yesterday’s session on Grand Turk, Wednesday 4 July.
Acting Governor Patrick Boyle headed the session which saw the Bill passed to the Consultative Forum for debate next week. This session followed on from the Publication of the White Paper earlier in the week.
“The introduction of VAT is hugely important for the future development of this nation,” said Acting Turks and Caicos Governor Patrick Boyle. “Put simply, VAT will help ensure that public services receive a steady and predictable income. Public finances have fluctuated wildly in recent times. Under the present system if the money dries up what do we do – stop providing essential services?
“I am certain that the incoming Government in November will be grateful to benefit from such an improved future cash flow. The introduction of VAT will help put this country on a stronger footing for the future by spreading the same tax take over a broader more stable range of sources.
“The introduction of VAT is not about taking more tax, it is about creating more stable public finances.
“We also have listened to people’s concerns about cost increase, making the number and range of VAT exempt and zero rated items as large as possible. We have ensured that the consumer will not pay VAT on their electricity and water supplies, nor will they pay more for their VAT exempt essential items – rice, flour, fresh meat, fruit and vegetables – and a host of other everyday items too. We also made sure that VAT was not applied to resort Strata fees, which was a key piece of feedback from the Consultation period.
“I do accept, however, that VAT will be newly applied to other items by larger businesses that have to register for VAT, such as legal, accounting, architectural or air-conditioning services which have not previously included tax in their sales price and this could make them initially up to 11% more expensive if these services are not being provided to another VAT registered business. But those registered firms affected would also have the benefit of being able to offset the VAT that they pay out to their suppliers against the VAT that they bring in from their clients. We also believe that it is fairer to have all significant businesses here in the Turks and Caicos Islands paying their share of the tax burden.
“The proposed rate of VAT of 11% is deliberately set no higher than Accommodation Tax. Indeed, VAT will replace this and a number of other taxes will actually make administration easier for both Government and business.
“We have listened and are trying to do what is right for the future of the Turks and Caicos Islands. I shall work with the Chief Financial Officer to ensure that in addition to the planned development programme with businesses, that we also reconsider how we might better communicate the undoubted benefits of VAT to the TCI with the consumer too.”
The VAT White Paper is available online at: http://turksandcaicosislands.fco.gov.uk/en/news/?view=News&id=783351182
