17th June 2022
Premier the Honourable Ellis Lorenzo Webster
Minister of Finance
Office of the Premier Minister
NBA Building
The Valley
ANGUILLA.
Dear Sir,
This letter is issued by and on behalf of the retail businesses listed in Annex A to this letter. Its intention is to register and underscore the very real and far-reaching and detrimental impacts to our businesses on the implementation of the GST in its present form on July 01, 2022. It emanates from a meeting of the Retail Business sector held on June16, 2022.
A wide cross section of Civil Society and indeed individual businesses have made oral and written presentations to the Comptroller of Inland Revenue and to Government at the Ministerial level including to you, Honourable Premier. The representations on the impacts and burdens of implementing the GST have been repeatedly identified – as has the lack of clarity and confusion in the measures to be undertaken for compliance. The answers given (and we include the shifting resolutions proposed by the Comptroller), have only served to increase alarm that businesses will not remain sustainable and competitive in the short, medium and long term.
Specific Concerns
1. GST was introduced in two phases. The first phase, IGT, was implemented in October 2019 and applied a 9% tax on all goods and merchandise imported in Anguilla. The Comptroller along with the Consultant advised businesses that an inventory of existing stock had to be produced as of June 30, 2022. This naturally raised the legitimate question whether the retail businesses would receive a tax credit for existing stock on which 9% had already been paid. The ludicrous suggestion was fielded that the businesses should call a fire sale of existing stock. The kindergarten logic of this was too glaring and was quickly removed from consideration. The alternative was to have the businesses place existing stock in a bonded warehouse. This too was not a practical solution for too many of the retail businesses.
Government Position on retail stock on hand
Introduce the 13% GST on existing stock with no ability for retailers to claim a tax credit on the existing stock. This will result in a severe hike in prices for the consumer and will correspondingly have a direct negative impact on sales for retail business.
2. Draconian penalties and fines. The GST introduces excessive penalties that can only be designed to intentionally destroy non-compliant businesses even for low level infractions and criminalise the owners.
Recommendations
1. Retain the 9% IGT on imports of future stock and add a 5% sales tax. There will be no claim backs on the 5% sales tax or IGT. Retailers will be entitled to 13% GST claim backs for services only. Result, compulsory registration for all retail businesses collecting the 5% sales tax.
2. Introduce the 13% GST on services only on July 01, 2022, with a later implementation date on the goods tax pending a fair and amicable agreement between GOA and the retail sector.
3. If neither of the reasonable, practical and fair recommendations 1 and 2 above are acceptable, we will hold to the position that full credit must be given for the 9% IGT on existing stock.
As a business community we understand we must pay our way to assist in the growth of the economy – and to build the social services sectors through taxes. The way to make the contribution is not through an onerous tax that will see the closure of far too many of our businesses.
We are aware that other real and practical proposals have been presented in very recent times. In essence, options for an amicable alternative to the GST Tax are being put on the table and should be seriously considered.
We have provided real options that will not cause pain to the consumer, the retail business sector, or the Government of Anguilla. We are therefore asking for an urgent meeting with you and your Cabinet no later than June 20, 2022. We await your urgent response and confirmation of the date, location and time of the meeting.
If Government’s position is that neither of these recommendations is acceptable, we are prepared to close our doors in protest.
ANNEX A
Signed:
cc: Hon Miss Dee-Ann Kentish Rogers
Hon Mr Kenneth Hodge
Hon Mr Kyle Hodge
Hon Mr Haydn Hughes
Hon Mr Merrick Richardson
Hon Mrs Quincia Gumbs-Marie
Hon Leader of the Opposition, Mrs Cora Richardson-Hodge
Members of the Media
Chairman of the Christian Council
Chairman of the Evangelical Council
Members of Retail Business Sector
