The Anguilla Chamber of Commerce and Industry says it fully understands the government’s efforts to raise money from taxes, such as the original Stabilisation Levy, to balance the budget to finance the running of the island, but will not support the imposition of further taxation without justification.
This was articulated by the President of the Chamber, Mr. Keithley Lake, in an interview with The Anguillian this week. He said that during the Chamber’s Radio Anguilla programme What’s on Today? on Friday, March 23, he had stressed that the Chamber was very much opposed to any further tax increases and had given the reasons for that opposition.
“Insofar as the budget crisis was concerned (and I think His Excellency the Governor made this clear), the British Government took no view as to how the budget was going to come into balance, be it taxes or budget reductions,” Mr. Lake told The Anguillian. “However, they adopted a policy that the budget had to come into balance and I want this to be clear. Given the gravity of that situation, the Chamber did not oppose that initial increase (the Stabilisation Levy) because (1) it was going to be short term; and (2) there was a very specific need for it. But now the announcement that there are additional taxation measures under consideration, to me, that case has not been made.
“It was our view that before you look into subjecting the businesses and the population at large to more taxes, you ought to be able to justify that the government is allocating its present resources prudently; and it has explored every other area that can be explored for savings before you go back to the people to impose more taxes on them.”
Mr. Lake, now his in third year as Chamber President, continued: “When the Interim Tax [Stabilisation] Levy was being proposed, to deal with the financial crisis that this present government faced when they took office, we were very active. We spoke to members of Government and we also spoke to His Excellency the Governor to try to understand the basis for these provisions. The Chamber did not oppose the Interim Tax Levy because we felt, as a responsible citizen organisation, that there was a financial crisis and the budget shortfalls had to be met. Since the government elected to choose this as a mechanism by which to address those shortfalls, we had no difficulty with that. But it has always been our position that you cannot tax your way out of a financial crisis. You have to grow your way out of the crisis. You have to invest in the economy for it to grow. Our economy largely comprises two sectors: tourism and construction. Construction is virtually non-existent at this point and tourism, from my amateur perspective, and based on the numbers, I see published, is beginning to come back – but we still don’t see the robust numbers we saw in preceding years.
“As one who considers himself a fiscal conservative, I very well understand and appreciate that we, as a country and people, have to take responsibility for this ourselves; and we have to come up with a balanced approach as to how we are going to accomplish this. To date, I have heard nothing of any investment, in either tourism or construction, other than the standard budget allocations that we hear from year to year.
“To be fair, I know that there are persons within the government – who I speak to regularly – who are very, very interested in making sure that a number of our hotel properties that are in trouble are either resolved or re-started. In all my dealings with those individuals, I have no doubt that whatever they can do to make that happen, it can and will be done. If we succeed, that will help to jump-start the construction industryas places will have to be remodeled and upgraded. Once the construction industry picks up you are going to see strong economic growth.”
Mr. Lake stated that it could very well be that the persons in government, proposing the new taxes, might have information that neither the general public nor the Chamber, or any other organisation, might be aware of. “All I am hearing is tax, tax and that, to me, if you are going back to the same people every time, taxing them, I think it is very clear what is going to happen,” he went on.
“You are first going to see those businesses start laying-off people because, obviously, businesses have to exist to make a profit and the only way to do so is to start cutting staff. This is exactly what you don’t want to happen. Secondly, a number of small businesses are going to close because, if your revenue is less than your expenditure because of taxation, it makes no sense for you to be in business.
“In the Chamber’s radio programme, I pointed out that a couple of months ago when the government temporarily rolled back the Customs levy on vehicles, the place was flooded with cars. I am not privy to the numbers, but I am sure if you do the calculations they would show you how much the revenue increased. What you are doing by that is, making it possible for a person, who would not otherwise buy a vehicle… to do so because the price of the vehicle and importation duties add up to a price that he or she can afford. I thought we ought to be going in a different direction in terms of looking at all our revenue measures and asking ourselves what can we do, within those measures, to promote growth and thereby stimulate the economy.”
Part 2: next week
