Whenever you see a lot of people struggling to solve a problem, there’s a pretty good chance that many don’t agree on how to solve it. Some may not believe it even exists – or that they had no choice but to accept it as the lesser of other, worse problems. With respect to GST, such contradictory beliefs have influenced our public discourse and impeded progress toward solutions. Some such perceptions have arguably evolved into monetary myths. One definition of a Myth is a “story told to…describe the history of a people,” as in, some of these monetary myths help explain how they were able to rationalise the culturally atrocious imposition of GST in the first place. Another definition of a Myth is “something that many people believe but that does not exist or is false”. Whether we think of them as myths or GST mendacity, it may be worth musing about a few myths for a moment.
Myth #1: There were no alternatives to GST.
In fact, many alternatives have been cited – and endorsed in most any discussion one is likely to have on the road. Over 100 established taxes were accepted and in place before GST. Of those, 25 range above $1 Million per year and top out at over $34 Million for Customs Duties in 2022 estimates. GST was justified for collection of an additional $22 Million per year. All the taxes have been lawfully established with functioning remittance systems needing no “public education” or intimidating, intrusive powers and penalties to impose them. There are dozens of alternatives to GST using adjustments to existing taxes.
Most recently, three specific approaches included: 10% spending reduction (over $22 Million from a budget over $220 Million of Recurrent Expenditures; however, the Ministry rejected that, saying $109 Million was reserved for emoluments and pensions and would mean a 20% cut on the balance, risking essential services without layoffs). The second was to cut 5% overall (or ~10% excluding salaries etc.) and add 5% to the Interim Stabilisation Levy. The third was to recoup ~$7 Million removed from the Public Assistance budget in 2022 and add 6% to the Interim Stabilisation Levy. These two options would replace 13% GST lost income/wages with 5-6% impact for those paying the Levy while dramatically easing pressure on families already hard hit from global inflation and eliminate GST impact for everyone – especially anyone unemployed, on fixed income, or earning below $2,000/month.
Myth #2: Anguilla is a tax-free jurisdiction, so they obviously need GST to run the country.
It was shocking to recently hear a member of the financial services industry say that he/she was “shocked” to learn that Anguillians are taxed, charged fees, and billed for levies in dozens of ways, at every turn. “You mean, I’ve been misleading foreign investors by telling them we have a tax-free jurisdiction?” Yup. Anguilla has over 100 taxes before GST!
Myth #3: Anguillians don’t pay their share – they should pay up to collect what’s due.
Here, the definition of a myth to explain history turns on its head. The question is, “What is the government’s share?” The history of taking the cost of public services from $5 to $20 Million a month is illustrated with basic math: Divide $5 Million by about 5,000 working households, and they can live fairly well when absorbing mostly Customs Duties “hidden” in every can of food and bottle of beverages, a tiny property bill buried in the rent, current without layers of levies and duties, and maybe cable TV and a small untaxed phone. Today, take the SAME population making the SAME wages and expect them to pay $20 Million per month, cover a massive increase in their landlord’s property tax, feed and clothe their children with 4x the duties, keep the lights on with skyrocketing ANGLEC bills, put taxed gas in the car and a phone to stay connected with new and higher taxes – and then add GST! Looks more like Anguillians are paying 4x their “share” now demanded of the same population making the same income for the same services – and many more now working two jobs.
Myth #4: They can’t cut spending, or civil servants will crash the banks with loan defaults.
In the real world, businesses increase and decrease staffing and spending over time in response to economic and market cycles in the most humane and practical ways. When the “British” (whoever that really was at the time) were allegedly telling the Chief Ministers to cut staff following the global recession, the abject refusal to re-evaluate a single position was not only bad for the taxpayers – but it was also bad for civil servants! The long-term impact of job security regardless of the work to be done, performance thereof, or advancing technologies to do it creates a workforce at risk of stagnation – with newly educated, promising graduates buried at the bottom of a hierarchy with tenure they could never rise above. Worse, as budgets tighten with more people vying for the same salary allocation – conditions force cuts and freezes, instead of right-sizing to pay fewer people higher salaries for more complex and meaningful jobs.
But all at once? Of course not! As a standing policy until fully optimised, the combination of attrition, reorganisation (do we really need 39 department heads and duplication with statutory bodies?) – leveraging technology, retraining and some redundancy/early retirement packages would lead to a dynamic, effective and sustainable public service where every role is valued by the public and allows for more career growth and depth for our civil servants. In turn, as the work is evaluated and outmoded tasks abandoned, the attendant spending on supplies, materials, operating costs, and indirect staffing costs would also generate offsets and savings over time.
Myth #5: Anguillians talk a lot about GST but do nothing; they just don’t care.
This myth circles back to the same people absorbing $20 Million per month, up from $5 Million the last time they could enjoy life and feel they had a bright future in Anguilla. Not since Bradshaw have so many Anguillians been so angry and anxious from oppression and economic injustice, as with GST. Care? How can anyone – not sure if they can keep food in the house for their children, paid by the hour, working two jobs – drop everything and carry a sign in a march? Call into a radio station during work hours? Or have an extra $10US for the plate or a rally to raise money for a family in need when they feel they are the ones who need it more? A sudden car repair they can’t afford, made worse by risking job loss for want of transportation. A sick child that keeps them home, losing countless hourly wages. An unpaid current bill that forces them to pull a bucket from the cistern and borrow some ice. A lost phone. Helping the family with a funeral. Far too many are exhausted from absorbing over 100 taxes in what they eat, where they live, get around, and get through. Do nothing? They are doing all they can to survive and feed civil servants who threaten fines and penalties unless they pay them $20 Million a month. Indeed, Anguillians do care and want Anguilla to be proud, strong and free – as she once was, before GST.
Repeal GST. Now.
This article reflects cultural and economic issues raised on July 5, 2021, by Ms. Melinda Goddard, Principal of ClienTell Consulting, to the House of Assembly Select Committee on (GST) Goods and Services Tax Public Hearing. References: Budget Address (2022); https://www.oxfordlearnersdictionaries.com/us/definition/english/myth.
