“Upon coming into office, this administration determined the fragile financial and economic position of Anguilla and set about to ensure fiscal prudence, instituting a culture of discipline to curb spending, decrease contingent liabilities and ensure transparency, accountability and good governance,” were the words promised in the Budget Address 2021.
Therein, our “fragile” economic “position” was then made entirely, shall we say, transparent, in describing readiness of IRD: “…for the implementation of full Goods and Services Tax (GST)… at a rate that is not yet determined but which is required to yield 8 percent of Gross Domestic Product (GDP).”
Transparency, as in “Business Activities Done in an Open Way”?
In business English, according to the Cambridge dictionary, “transparency” means “a situation in which business and financial activities are done in an open way without secrets, so that people can trust that they are fair and honest.” Given that commitment to transparency, getting unelected parliamentarians to pass a law demanding an unnecessary new tax – to be hidden from consumers was nothing short of audacious. And…Did they really not know the rate before committing to implementation, if “good governance” was also a stated value?
Tax-inclusive Pricing before GST? Covering Customary Costs
It is sobering enough to realise that most prices were already “inclusive” of duties, excise taxes, fees and Interim Goods Tax (IGT). However, these were brewed into the prices for everything already, from: our food, beverages, clothing, to auto, household and other merchandise, as well as services, from restaurants and bars to taxis, ferries and car rentals, to professional and contractor services, passed along from countless taxes they paid on their electricity, Internet, fuel, supplies, property, etc.
For example, before implementation of “full” GST, beer attracted 20% duty, 1% fee, 19% excise, and 9% IGT, or 49% tax. That was “inclusive pricing” already making us all consider drinking more often – and contemplating how to make ends meet while being drained of $20 Million of taxes every month to keep this government afloat.
Add GST, and port tax hops up to 53% on a beer! Cheers! Even when a grocer deducts GST, up to 40% would still be funnelled into the government’s glass. That is, depending on the mark-up to cover the store’s utilities, space, staffing, deliveries, loans, vehicles, etc. – and the taxes and fees levied on them, as well.
However, a restaurant charging say $5US for that beer would then bubble to $5.65 with GST, making the tax a lot harder to gag down – or to bottle up!
Tax-inclusive Pricing Imposed in the GST Act: Concealing Customer Costs
Section 95 of the GST Act calls for “tax-inclusive pricing” when collected from the consumer. If we are allowed to know the duties, fees, excise and GST when we import such items ourselves, how is this business practice “transparent”?
And, the IRD press release dated 12 September cited only part of the law governing this topic – Why? They threatened, “…that all prices displayed, quoted and advertised should be inclusive of GST” by November 1st – or, “Failure to adhere to this timeline, may result in enforcement action.”
As a reminder, section 95 says: “(1) A price charged by a taxable person in respect of a taxable supply is deemed to include, … the tax charged on the supply under section 8(1)(a), whether or not the taxable person has included tax in such price… [and requires stating in] … advertisement or quotation that tax is included.” The law also grants that, “…price tickets …need not state that the price includes tax if this is stated by way of a notice prominently displayed at the premises…”
We are told to stash the tax but then state it is included? Why? Hoping consumers won’t notice – or they’ll ignore prices inflated yet higher with new taxes? How transparent is that?
Exclusive Pricing is Described in the GST Law – So Why Demand Deception?
The press release was also not transparent with respect to section 95 (3), wherein, it states, “(3) A taxable person may advertise or quote a price in respect of a taxable supply as exclusive of tax provided [that] – (a) the advertisement or quotation also states the amount of tax charged on the supply and the price inclusive of tax; and (b) the price inclusive of tax and the price exclusive of tax are advertised or quoted with equal prominence or impact.”
This suggests that a menu could simply add the “inclusive price” next to the original prices “with equal prominence” and be within the law. Why is this government committed to “transparency” – yet demanding deception of consumers and visitors?
…And a Cup of Cruelty!
Perhaps the most intemperate aspect of this mandate is to ignore the final swill of section 95, which states, “(5) The Comptroller may in the case of a taxable person or class of taxable person approve any other method of displaying prices of goods or services by such persons.”
After the entire restaurant sector and many other retailers appealed, implored, and respectfully requested respect for their requests, this administration has now officially withdrawn its “temporary arrangement” under which restaurants could comply with this undemocratically passed law in the same manner as it has long stated the rate of service charge: at the bottom of their menus (or for retailers, at the tail of the receipt). Section 95(5) states that the Comptroller could extend such consideration (any other method!) to the entire sector indefinitely and remain within the GST law they cite only in part!
Pouring a 13% increase onto every plate and beverage price – already frothing with untold taxes and global inflation – puts far too many restaurant menus beyond reach for our most intrepid travellers. They will dine-in more often, give no more gratuities, or perhaps abandon Anguilla, with GST, especially enforced to this effect. And… as tourists avoid restaurants – or decamp to other destinations – private sector jobs will disappear.
So much for the transparency of a government so sensitive to our “fragile” economy! After GST was heaved into this country against countless objections, alternative recommendations, and appeals to the contrary, this is a callous chaser to this round we’ve been forced to swallow.
In short, a ”statement” on menus or receipts to obey this oppressive order should be “approved” as long as it takes for reasoned leaders to rise, repeal and replace GST with rational options, once and for all!
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 (2021; pps. 2, 28); Section 95, Goods and Services Tax Act, 2021; Integrated Customs Tariff (Amendment) Regulations (2019); IRD Press Release (12 September 2022; IRD-PR-13-2022); https://dictionary.cambridge.org/us/dictionary/english/
