In Anguilla our needs are many and our wants are even more numerous. However, as a country, we are currently unable to meet all our collective needs and wants. This is a situation that we all should and can seek to progressively change, during 2017.
How we respond to our tax system is one of the factors which will significantly determine how soon we turn around our current misfortunes. The very reasonable view that the Government should concentrate on collecting tax arrears rather than implementing new taxes, which are likely to be paid only by those who already honour their tax obligations, has often been expressed. It is also reasonable to expect that persons will voluntarily honour their tax obligations as this would ensure a shared burden in terms of meeting the requirements of a developing society. My hope for 2017 is that Anguillians and other residents of Anguilla will voluntarily meet their tax obligations, in a timely manner, thereby providing the relevant authorities with the much needed resources to ensure the development of our health, education, sporting and cultural and arts facilities, to name but a few of the areas needing attention.
We often compare our facilities and programmes with those offered in developed countries and understandably Anguilla comes up woefully short. Very often, the countries whose facilities and programmes we are envious of have robust tax systems and a very high percentage of citizens who meet their tax obligations in a timely manner. For example, it has been reported that, in Canada 90 percent of taxes and tax instalments are paid on time. We, quite correctly, expect elected and appointed officials in government to play a lead role in improving the robustness of our tax system. However, by voluntarily meeting our tax obligations we, as individuals or as entities, can play our part in ensuring the availability of resources to meet the needs and wants of various sectors of our island community, including our children, our elderly, our sick, our talented and our entrepreneurs.
Businesses in Anguilla, particularly long established businesses, can participate in putting Anguilla in a better position to meet our needs and wants by taking a different approach in relation to duty concessions. Recognising that financial resources are necessary to respond appropriately to the needs of citizens and residents; will business persons, who would normally request duty exemptions, be averse to requesting a reduction in duties rather than an exemption from such duties? This is actually a facility available to importers and to the House of Assembly under the Customs Act. Section 77 (1) of the Customs Act provides as follows:
‘House of Assembly may reduce or exempt goods of specified person
77. (1) The House of Assembly may by resolution reduce the duty on any goods, or may exempt from duty any goods, imported into Anguilla by a specified person and may make the reduction or exemption subject to such conditions, including conditions on the importation, use or disposal of the goods, as may be specified in the resolution”.
Our challenges are not unique. Mr. Chris Sinckler, Barbados’ Honourable Finance Minister, recently expressed concern that some business entities in Barbados do not make provision for the payment of taxes when they are being established. It is certainly reasonable to expect businesses to make provision for the payment of taxes, particularly after having been operational for some time. It is accepted that there might be circumstances which justify a business, whether a new or existing venture, requesting duty exemption or a reduction. Such a grant should, however, in the absence of an established sector policy, come after a thorough examination of the business records and plans of the requesting entity, to ensure that the request and any grant are justifiable. Business entities, seeking to promote their business enterprise without paying the requisite taxes, cannot reasonably object to a comprehensive examination of their business records and plans to ensure that any exemption or reduction in duty payments is justified.
It may be argued that importers granted exemptions do contribute to meeting our social, cultural and infrastructural needs, as they are required to pay administrative costs, equivalent to 5% of the value of the goods for which duty exemption is granted. This must, however, be compared to the service charge that must be paid on goods imported into Anguilla, which are not relieved of customs duty under section 77 of the Customs Act. The service charge is equivalent to 6% of the value of the imported goods and is in addition to the actual duties payable on the imported goods. If business entities that can, are required to pay the 5% administrative charge, as well as, a reduction in duty payable on imported goods, rather than being exempted from the payment of any duties, this will result in an increase in the financial resources available to meet the varied needs and wants of the citizenry and residents of Anguilla. This, I believe we can all accept, would be beneficial to all of us who call Anguilla home.
Oliver Wendell Holmes Sr. is reputed to have said, “I hate paying taxes. But I love the civilization they give me.” It is my hope that in 2017 our desire for the civilization that paying taxes can give us will be far stronger than any hatred we have for the paying of taxes. We need to build our revenue if we are to adequately meet our social, cultural and infrastructural needs and desires. Our aspirations for champagne quality services and programmes will not be met while the level of our contribution only allows us to afford sugar water quality services and programmes. This is something we can and should begin to change in 2017. I intend to continue, with God’s help, to play my part.
(Stanley E. Reid is the Principal of his Legal and Consultancy Practice, SER – Legal & Consultancy Services. He previously served in senior posts in the Anguilla Public Service including Senior Crown Counsel, Permanent Secretary Public Administration and Deputy Governor of Anguilla.)
