On Thursday, 2nd September 2021, the Christian Council and Evangelical Association hosted a livestream “GST Update” by Ms. Melinda Goddard, MBA, principal of ClienTell Consulting. It was a follow-up to the 5th July 2021 presentation to the House of Assembly Select Committee on Goods and Services Tax.
Pastor Philip Gumbs noted in his introduction, GST “was a matter that engaged the attention of Anguilla as a whole…” That as the law was to have been “modified and made more friendly” the presentation would look at the final bill to “analyse what adjustments have been made… [with the update] for Anguilla, not just for the Clergy.”
The first segment focused on the final law published the day after the vote that included the Attorney General and Deputy Governor on 29th July 2021. It would apply to all, as Section 8(4) states: “No person, no class of persons, no transaction, no class of transaction, no import, no class of import is exempt from GST, except as provided by this Act…”
As previously reported, the 13% GST rate and $300,000EC registration for “taxable supplies” (goods or services) were added since the draft. Notably, statutory bodies, auctioneers, anyone engaged in public entertainment, or renting accommodations for less than 183 days – and fishers, farmers, export manufacturers, grocers or pharmacists, anyone seeking “zero rated” imports is also required to register and file monthly.
Demanding, 7-year record-keeping and “routine audit” power to inspect and seize records or computers from a “taxable person or any other person” were unchanged. However, with a High Court writ, night time records searches and seizures with police assistance were also in the final bill.
Section 64, “Notice to Obtain Evidence” requires anyone “whether or not liable for tax” to appear before the Comptroller “on oath” to provide records or computers as evidence against oneself or “any other person”.
A new Section 18 states the Government “may withhold GST” without clarifying whether suppliers have to pay GST upon invoice – chancing never recouping it or having no offsets if randomly withheld.
As before, 27 sections list severe criminal and civil penalties in a maze of compliance risks. And, whether “satisfied” or given “reason to believe” within 5 years, the Comptroller’s power to impose an assessment “in his opinion” against anyone also remained.
An alarming new clause 38 (4) states a person who disputes an amount of GST “…shall be required to pay 50 percent of the amount disputed …before the Comptroller considers such objection.”
Some 25 discretionary sections are subject to Regulations, up from 22 in the draft. While Section 103 empowers the Minister to change “any monetary amount” in the bill, Section 100 (1b) leaves the entire law open to higher rates, lower thresholds and fewer exemptions whenever any government wants to increase spending by Regulation for “any matters necessary or convenient to be prescribed for the better carrying out or giving effect to this Act.”
“Could ‘any matters’ include GST going from 13% to 17% as in the 2019 Budget estimate, or to 20% as in the UK, or even 27% as in Hungary for VAT,” Ms. Goddard asked.
Part 2 of the livestream addressed $10.6m of spending increases cited at the Committee hearing. By examining the Appropriation (2021) Act and comparing 2022 Forecasts to 2021 Estimates, 34 of the 38 departments were projecting increases: 10% higher Emoluments (e.g. salaries, temp pay, wages, back pay, etc.) and 8% higher Expenses (e.g. travel, utilities, supplies, consultants, hosting/entertainment, rentals, etc.).
Beyond likely “GST” functions, an additional $11,625,939.00 was forecast for civil servants and their expenses – more than half of the $22m higher annual tax burden demanded for GST in 2022.
Staffing was also considered. Page 80 of the 2021 budget forecast also included a 32% increase of 315 hires, taking 988 to 1,303, if recruited. These would be in addition to more than 500 in the statutory bodies, exceeding 1,800 all told.
Of particular note: The 2022 Public Assistance forecast on page 74 decreased 54% by $6,040,724 while Emoluments projections rose by over $8.3m. Regressive taxes such as GST, sales tax and Customs duties have proven to increase poverty risks. Such a cut could result in a cruel shortfall while taking 13% from someone’s last dollar.
Civil servant back pay was also noted as a reason for the increases after the hearing. However, the net increase for back pay for 2022 is $372,401 across departments, or 4% of $8.3m of higher projected Emoluments.
That this government indebted the people by another $20m in a “policy based loan” that demanded GST as a condition was a final curiosity. The “Debt Service” in the budget was projected as $16.2m in 2022, up from $16.08m, an increase of $121,657. That would represent 0.5% of the extra $22m demanded for GST.
Ms. Goddard began by saying she had once expected “this government, that promised otherwise, and surely the British, would have been simply too ‘civilized’ to have allowed this ‘howling beast’ into the honourable House for its first reading, much less, its passage.”
She concluded by citing four reasons to repeal GST:
? Public consultations without essential information, flouting the Committee report, and publishing the final law after enactment;
? Unprecedented AG and DG votes forcing passage, overriding elected Ministers, and after dismissing innumerable objections and proposed alternatives;
? Cultural affronts in the bill and related risks of abuse of power, lost jobs, closed businesses and poverty; and –
? Codifying powers to manipulate regulations to force the public to pay ever higher taxes for unlimited spending after doubling the tax burden and doubling it again for the same services and population; now at a monthly cost of $19m, before adding $22m/year from GST.
Ms. Goddard reiterated her Committee recommendation to enact Balanced Budget Legislation and to adopt alternatives, even if that meant adjustments to more than 150 established taxes, which this government chose to ignore while forcing GST upon the People of Anguilla.
The Anguillian wishes to thank Ms. Melinda Goddard, MBA, principal of ClienTell Consulting LLC for this summary of her livestream presentation to the Christian Council and Evangelical Association on 2nd September 2021. The livestream is accessible on the Church of God Holiness facebook page. The 2021 Budget is available at www.gov.ai, and the GST bill is in the final section of the 30th July 2021 Gazette post.
