16th May 2022
Hon. Mr. Ellis L Webster Hon. Mr. Dwight Horsford
Premier of Anguilla Attorney General of Anguilla
Premier’s Office Attorney General’s Chambers
Old NBA Building Caribbean Commercial Centre
The Valley The Valley
Anguilla Anguilla
Dear Hon. Premier and Hon. Attorney General,
Goods and Services Tax Act
We act as Solicitors for the Concerned Citizens of Anguilla. This letter serves as the pre-action protocol. Reference is made to the previous correspondence of our client in relation to the Goods and Services Tax Act, 2021 (‘GST Act’) in particular our client’s letters of September 10 and October 12, 2021, respectively. This letter seeks the earnest reconsideration of this government on the application of the GST Act and its effect on the citizens of Anguilla.
In the interest of brevity, we do not intend to restate the background that troubles this matter. Rather it is our intention to highlight further discrepancies in the Act that blatantly undermine the Constitution and the jurisprudence, which stands as a vanguard of constitutional rights.
Consultation
Firstly, it is our respectful position that the failure to engage in the usual consultative procedures in a meaningful and adequate manner, is the first limb that raises concern. There are undeniable acts by the Government of Anguilla that without more, ensconce the principle of legitimate expectation. The history in Anguilla clearly evidences the authorities consulting with the citizens of Anguilla, via town hall meetings regarding major legislative changes. The GST Act represents, we submit, a major legislative change. As a result, this consultation with the citizen is viewed as part and parcel of the process for the implementation of legislation. The consultative step is a clear, unambiguous and unqualified practice of successive governments, irrespective of which party reigned. It is contended that this consultative step was not taken or not taken in good faith by the Government of Anguilla. This is particularly evidenced by the fact that after a Select Committee Report was published in relation to the bill, there was no public consultation on the findings of the report. Instead, without any notice to the media or to the general public, the Government purported to offer a response to the report via social media, one hour before the passage of the GST Bill into law. We contend that this does not constitute good faith consultation, which has been part and parcel of the legislative process in Anguilla and which the citizens have come to expect.
GST Act Constitutionality
We respectfully reiterate our position that the GST Act is unconstitutional. For the reasons stated below, the unconstitutionality will be addressed seriatim. It is our belief that the Act needs to be struck.
Broadly and indisputably, as the supreme law of the land, where ordinary legislation like the GST Act is in contravention of the Constitution of Anguilla 1982 No. 334 (as amended), then such legislation is null and void. The extent of the unconstitutionality must be struck down. The separation of powers doctrine is a fundamental tenet of the Anguillian Constitution. Although it may be considered trite law, which ought to require little explanation, a brief statement is proffered. The Constitution of Anguilla guarantees the separation of the functions of the Executive, Judiciary and Legislature.
The Comptroller of Inland Revenue, who is an agent of the Government of Anguilla operating under the arm of the executive, is responsible for the administration of the tax regime and the collection of the said taxes. The lines of the separation of powers doctrine are blurred where the GST Act attempts to imbue powers to the Comptroller that are prima facie unconstitutional. This is demonstrated by Section 45 (2) of the GST Act, which purports to confer on the Comptroller powers akin to the Judiciary. Pursuant to the GST Act, the Comptroller is empowered to file a statement setting forth the amount of tax due. That statement shall have the effect of a civil judgment lawfully given in that court. It is our contention that this provision offends the separation of powers doctrine and is ultra vires the Constitution of Anguilla.
The doctrine of separation of powers was discussed by the Privy Council in Hinds v The Queen. The Privy Council stated that implicit in all Westminster Model constitutions is that judicial power is vested in persons appointed to hold judicial office. The principle that only members of the judiciary are empowered to make orders of the Court is well known. This section grants the Comptroller not only the power to make Court orders but to compel the Court to act in a particular way. The section reads that once the statement is prepared by the Comptroller the Court “shall issue a writ of execution in respect against the defaulter.” Resultantly, the Court is not allowed to make any independent evaluation on the merits but must issue a writ once the Comptroller has implored it to do so. Therefore, the Court is stripped of its judicial function and this function is conferred on the Comptroller.
It is our considered view that the powers granted to the Comptroller by Section 45 (2) are powers which are to be vested exclusively in the Judiciary. Therefore, this section of the Act is ultra vires the Constitution.
Moreover, the GST Act commits breaches to the fundamental rights and freedoms of the individual enshrined in the Anguillian Constitution. Chapter 1 Section 7 of the Anguillian Constitution addresses the protection from the deprivation of property. It reads inter alia:
“(1) No interest in or right over any property of any description shall be compulsorily acquired, and no such property shall be compulsorily taken possession of, except by or under the provisions of a written law which –
(a) prescribes the principles on which and the manner in which adequate compensation thereto is to be determined;
(b) requires the prompt payment of such adequate compensation;
(c) prescribes the manner in which the compensation is to be given; and
(d) the manner of enforcing the right to any such compensation.
(2) Nothing in this section shall be construed as affecting or
making or operation of any law so far as the law provides for the taking of possession or acquisition of any property, interest or right –
a. in satisfaction of any tax, rate or due…” (Emphasis Ours)
It is accepted that the Legislature has the authority to pass laws for tax purposes. However, we contend that the GST Act goes beyond the bounds of acceptability. Pursuant to sections 38 (4) and (5) of the GST Act, where the amount of tax payable is disputed, it mandates that either the full amount is paid or fifty percent (50%) is paid prior to appealing the amount assessed as due and owing. Ironically, ‘in satisfaction of any tax’ can be invoked as a constitutional shield by the draftsman. The shield loses its protective ability when the 50% or full amount paid is surplus of the taxes actually due and owing. The excess is not, and on the literal interpretation of the unambigous words of the Constitution, “in satisfaction of any tax…”.
It is acknowledged that there are provisions for redress such as the creation of the Appeals Tribunal and the final appeal to the High Court (sections 39 and 41 of the GST Act, respectively). The attempt falls short of the constitutional requirement for a compensation regime. This assertion is made since Section 41 provides no timescale for a determination. Should a citizen pay as required by section 38 (4) or (5) but eventually succeed before the High Court and have their liability reduced or overturned, the tax was not lawfully due under the Act, but yet the Act provides no scheme for compensation for the deprivation of their property. No provision is made for the payment of interest for the period when the purported taxes have been paid during the appeals process, which might take years. Furthermore, if the payment of tax (later deemed to not be taxes due) reduces the liquidity of the business, which harms profitability or leads to the collapse of the business, there is no mechanism for compensation. This appears in our respectful view to be contrary to paragraph 7 of the Anguillian Constitution.
Reasonably Required
A crucial assessment which must be made when considering the constitutionality of any restriction is whether it is reasonably justifiable in a democratic society. The GST Act purports to be an act which imposes a requirement on qualifying businesses to pay the GST Tax. Therefore, it is critical to assess whether this measure is reasonably justifiable. We contend that the GST Act is not reasonably required in Anguilla, as it will cause considerable strain on businesses throughout the country. The Privy Council, Anguilla’s apex Court, has given guidance on how to approach the question of whether an Act of Parliament was unconstitutional. In Attorney General and Minister of Home Affairs v Antigua Times Ltd (1975) 21 WIR 560, Lord Fraser stated at pages 573 – 574:
“In some cases, it may be possible for a court to decide from a mere perusal of an Act whether it was or was not reasonably required. In other cases, the Act will not provide the answer to that question. In such cases has evidence to be brought before the court of the reasons for the Act and to show that it was reasonably required? Their Lordships think that the proper approach to the question is to presume until the contrary appears or is shown, that all Acts passed by the Parliament of Antigua where reasonably required. This presumption will be rebutted if the statutory provisions in question are, to use the words of LOUISY J, “so arbitrary as to compel the conclusion that it does not involve an exertion of the taxing power but constitutes in substance and effect, the direct execution of a different and forbidden power”.
As aforementioned, the GST Act vests the Comptroller with power which is not only ultra vires, but is not justifiable in the face of the GST Act. In section 65, the Comptroller is the sole individual responsible for commencing criminal proceedings against an individual who commits an offence under the Act. We contend that other than being a violation of the separation of powers doctrine, this further represents an arbitrary exercise of powers by the Comptroller. As a member of the Executive branch of Government, his office should not be empowered to commence criminal proceedings under the GST Act. The potential for abuse of this power is readily apparent. It is an arbitrary exercise of power and is, in our opinion, not reasonably justifiable in a democratic society.
To compound this the Act imposes severely onerous penalties. Section 85 of the imposes a penalty of the greater of EC$500.00 per day or 10% of the tax payable for the relevant period for a failure to file GST returns on time. Section 88 prescribes a $15,000.00 per day fine for failure to display the GST Tax Registration Certificate. These penalties are exorbitant and are disproportionate to any potential GST tax liability and if left unchecked could be the ruin of many businesses on Anguilla.
Conclusion
Pursuant to Section 57 of the Anguilla Constitution, the Governor can only assent pursuant to that paragraph to a lawful and constitutional Bill to make it law. Assent to an unlawful and unconstitutional Bill is itself unconstitutional. For the reasons abovementioned, it is maintained that the GST Act is ultra vires the Constitution of Anguilla. As a result, the Governor’s assent to the GST Act is unlawful in the circumstances. The old adage and aphorism bear repetition: “justice must not only be done but must manifestly be seen to be done”. We invite you to use your good offices to prevent any and all breaches of our constitutional rights and we look forward to receipt of your response on or before 31st May 2022.
Yours faithfully,
Carlyle Rogers
Cc: Her Excellency, The Governor
Honourable Ministers of the Crown
Honourable Ministerial Assistants of the Government of Anguilla
President of the Concerned Citizens of Anguilla
