26 February, 2010


Anguilla Revenue Study.  This is the point at which we Anguillians have to pay for our government's excesses over the past couple of years.  I understand that our public debt now exceeds EC$200 million.  Now, it has been revealed that one Mr Alan Roe, an Oxford Management Policy Consultant, is coming to Anguilla to study our economy and finances and to make recommendations as to how we are to improve our revenue to meet our bills.  Our agreeing to this exercise, you will remember, was a condition that Minister Chris Bryan laid down for permitting our Ministry of Finance to borrow more money.  Mr Roe is a former World Bank economist, and a lecturer in economics at Warwick University.
I see from his Itinerary that Mr Roe is arriving on 29 February.  I hope the relevant officers of the Ministry of Finance do not do all their counting in this way!
The most scandalous situation exists in the area of property tax and hotel accommodation tax.  Will Mr Roe be successful in impressing on us our need to pay our taxes?  Or will we continue our historic path of habitual tax evasion?  Would someone please remind Hubert what he is supposed to do now that he is in government?  There is no excuse for his continuing to refuse to pay his property tax.
My contributions to Mr Roe's exercise are as follows.  Now that the accounts are all computerized, and since government does not have to pay for postage, would it be such a problem for the various government departments that collect revenue to send out a reminder or bill to all taxpaying citizens at regular intervals?  I know that governments do not usually remind people of their obligation to pay, but is it so difficult to organize?  I never remember that I have not paid my property tax until later in the year when I am writing up my accounts and find that column empty.
       Can I suggest that he recommend that we begin to move to a value added tax system?  It would be relatively easy to introduce VAT for services.  All of the major service providers in Anguilla have computerized accounts.  We do not pay income tax.  It would be comparatively easy to introduce and to enforce a 20% tax on all services.  Small tradesmen will be able to evade the tax comparatively easily, but not the major ones whose accounts are computerized.  We could continue for the present to pay customs duties on imported goods until we have developed the expertise to replace customs duties with the VAT.
Anyway, now we know that Victor did sign an agreement with the British to engage in this study in exchange for them permitting him to borrow for the elections!  That is how he was able to pay some of our bills last month.
Related posts:
Approvals –           4 September 2009
Green light -          23 September 2009
Income tax -          27 September 2009
FCO Response -      2 October 2009


  1. What is the Chief Minister's excuse for not paying his property tax? Is he disputing it? Or, does he think that is part of his perks as a policitian?

  2. On an island with 2 sea ports and 1 airport they can tax stuff as it comes in and not miss much. If having a computer at your store means you are going to have to pay a 20% VAT then everyone will get rid of their computers. It will be far easier to cheat on a VAT than it is to cheat customs. A VAT would not improve things.

  3. Taxation is theft. More taxation is more theft.

    A better idea: fire half of the government employees, better, cut the government's salary line item by half.

    Even better, sell *all* government departments into the private sector that don't have anything to do with the physical security of Anguilians (like, say, police, maybe fire).

    Any department that can't make it as a going concern in the public sector should tell you more than you need to know about it's usefulness to "society" as a whole. The rest of the proceeds should pay down the debt with money leftover for a tidy refund check to every Anguillian currently resident on the island.

    Government duties, fees and regulations already choke the Anguillian economy and are causing its impending collapse.

    Anyone figure out yet that the more laws, taxes and fees there are, the more corruption there is? That passing *more* laws does *not* make for *less* corruption?

    "Sweep them out", indeed.

  4. It is difficult to know when Don is being serious and when he is just chatting to be provocative.

    I think a 5% income tax would be easier to impose and to collect. We already have the database in Social Security's computers. It would move us off the "no-tax" list. No one would miss the 5%. Most employers would just give employees an automatic 5% raise anyway. It would be relatively painless. It would probably raise more than the suggested 20% on services only.

  5. I agree that it would provide advantages to introducing VAT on services only at the moment. Customs duties are internationally frowned on as being in restraint of trade. They are condemned by the WTO. Customs duties are being replaced throughout the West Indies by VAT.

    It will be such a big shock to the Anguillian public that it would probably be better to start off keeping customs duties on goods, and imposing the tax on services only. Fewer people would be affected, so the controversy would be reduced. Then, when customs duties come to be abolished, the VAT could simply be extended to goods as well.

    But, not 20%! How about 10%?

    What is certain is that government cannot be reduced. Government is the morass into which all the unemployable Anguillians expect to be absorbed. The public service exists to employ all those persons who are not imaginative or enterprising enough to create businesses that will employ themselves and others. Reducing government means letting go large numbers of othewise unemployable people.

    There would be rioting in the streets.

  6. A government "job" is not actual, productive, employment, where actual economic value is created. A government "job", is, pure and simple, theft from all the people who paid duties, fees, and taxes in the first place.

    By virtue of the peculiarities of force-monopoly, the only exception is police and other individual's directly responsible for the public's right to be secure in their persons and property.

    Tax-eaters are a drain on all markets, and by extension, all *productive* individual Anguillian citizens.

    Most charitably, a government "job" is simply taking water from one side of the economy's bucket and pouring it into the other. Not so charitably, it's like removing all the water, pouring three-quarters of it into the sand, putting the rest back in -- and calling it a full bucket...


    The Anguilla tax system works perfectly. Our tax system is not broken and so it does not need fixing.

    What needs fixing is the SYSTEM of bad governance which allowed a 25% increase in already high civil servants and ministerial pay, in the midst of a worldwide economic recession!

    As for the 75% salary increase which the outgoing AUF government gave itself since it came to power , that is theft pure and simple!!!.

    INCOME TAX- no ( salaries are too low) – other peoples agenda.
    VAT – no ( unnecessary confusion and hardships) –other peoples agenda.

  8. Lest we think that Don's "joke" above about a 20% VAT is funny, it's important to note that 25% VATs are common in the EU, particularly in Scandinavia: http://en.wikipedia.org/wiki/Value_added_tax#The_Nordic_countries

    Be careful what you wish for, folks. The tax man's boot on your throat is still a boot on your throat no matter how nice the boot's leather is...

  9. Great just what we need more socialist economic policies in Anguilla. England is broke, Greece is broke, Europe on the verge of economic decline and we have not learn a thing about socialism. Even Americans haven't learnt anything when they can embrace the democrats socialist, tax everything and punish the private sector policies.

    If Anguilla government really wants to save money and ensure Anguilla is fiscally sound in the future they need to embrace true conservative economic principles. Not the faux conservatives of Europe.

    Here are 11 simple ways the government can save money:

    1. Reduce the size of the public service (especially by reducing the number of public servants and by eliminating posts that can be done by one person. In addition, eliminate the number of paid political adviser appointments and embrace unpaid expert advice.

    2. Embrace IT to make the service and the sector more efficient.

    3. Provide small businesses with incentives to grow. A large private sector will ensure more jobs for everybody.

    4.Keep taxes at reasonable rates.

    5. Eliminate perks for elected representatives such as expensive American made cars.

    5. All public service vehicles should be the size of smart cars.

    6. The RAPS should be using bicycles, motocycles and smart cars.

    7. Create a balance budget amendment legislation to protect from spendthrift MOF.

    8. Elimnate travel allowances for ministers when on island. Let a driver be assigned to them.

    9. Give incentives to persons investing in affordable housing accommodations of 10 or more apartments. Prices must remain within a range for a set period. Example rent for a 2 BR apartment cannot go above the range of 350-600 in 5 years. After that period the developer can compete with market prices.

    11. Stop spending needed time and resources on man-made climate change assessments and understand climate change is a result of natural climatic cycles. Instead focus those needed funds on recycling, good solid waste management policies and keeping of our environment clean by using more efficient practices.

    10. Across the board, cut wasteful spending and redundant departments.

    The people of Anguilla voted for real change and I hope this new government can recover the short change the last one gave us.

  10. The solution is not tax increases or the imposition of new taxes upon an already bankrupt economy. The solution embraces the fundamental lesson of basic Economic Theory; reduced cost leads to increase "sales" (turnover) which in turn leads to increased "profits".
    Cut all import duties by 50% to 75% to 100% for licensed Retail and Wholesale importers and introduce, not a Value Added Tax as Don suggests, but a straight Sales tax of no more than 10% at the point of sale.

    Introducing an Income Tax, of whatever %, will devastate the vast majority of Anguillians who already face hardships in making ends meet. Introducing it would Not cause Employers to increase salaries by 5% or any % at all. It would cause layoffs galore because income tax would increase the cost of doing business - in a constricted Economy - without any positive effect on revenues for employers. Employers would therefore have to cut costs up front in order to give them a fighting chance at survival. the people would suffer because they would be losing jobs. The Businesses would syffer because the people would have no income available to buy their goods and services. The Treasury would suffer because of reduced numbers frpom whom to collect taxes and duties etc.
    Last year, for example, a huge number of vehicles were left unregistered, particularly in the commerc ial sector, due to massive increases in the license fees. Owners had to make a choice, and they chose to park up those vehicles.

    It is a proven fact that a reduction in costs/prices leads to an increase in sales/consumption of goods and services, which in turn leads to an increase in profits and collectible revenues for Government.

    In times of Economic Depression, the very worst thing that any Government can do is to add new taxes or to increase existing taxes. To do both would be to make certain the collapse of Anguilla.

    What this new Government needs to do is to REDUCE taxes etc, mandate the banks to reduce lending rates and to increase lending in an orderly fashion so as to put money into the system. Any otherwise is a recipe for disaster.

    Reducing Government expenses by freezing all salaries etc. and by investigating the legality of those vulgar increases self- awarded by the past Government with a view to bringing back to their pre- increase levels ( thereby ensuring that the former Ministers DO NOT get the massive gratuities and Pensions which they created for themselves, like Bunton's ES$ 800,000.00 Gratuity and EC$ 12,000.00 per month Pension, can go a long way in assisting this Government in bringing Econom ic stability and growth.

    Tax increases and new taxes will, have no doubt about it, create massive social, economic and political strife in Anguilla.

  11. Reducing taxes is a must.
    Reducing government spending is a must.
    Reducing the number of government paid workers is a must.
    Mr Alan Roe can not make any decisions on finances until a full audit is completed and signed off on. So why is he here?
    Be careful as he could be just trying to impose taxes because it is the british thing to do.
    When the audit and investigations into wrongdoing are completed we can see what needs to be done until then it is as usual just a load of nonsense being imposed on us again by the british.

  12. Alan Roe is coming to Anguilla from the Turks & Caicos Islands. He did a similar exercise there and produced a report. If you have any interest in previewing how he approaches the task he has been commissioned to do, you can do no better than to read his TCI Report.

  13. That TCI Report does provide insight into what he thinks and what we can expect.

    He says taxes on work permits are "overall are poor ways to raise revenue" and "score pretty badly on all the criteria other than #7". High fees on work permits helps limit the numbers of foreigners who come to work. It is a win in raising taxes and a win in limiting foreigners. Taxes hurt or reduce the thing taxed, and in this case that is good, so it is a great type of tax. It is like taxing alcohol or cigarettes, we want to reduce these things. He is very wrong.

    Similar thing for selling land to foreigners, we tax it at 17% both to make money and to limit the quantity, double win. In TCI he says it is a very poor type of tax, and then notes that it is the second largest source of revenue. It is a good source of revenue both in quantity and the side effects. He is very wrong.

    Having taxes on tourists and expats buying land means that for the general population taxes are low. So for the average citizen in TCI or Anguilla these are "low tax jurisdictions" even though, as he notes, the tax as percentage of GNP is not particularly low in TCI. Focusing on hotels and tourist restaurants means fewer places for government to deal with and less hassle/overhead/trouble to the average citizen/voter. This is a good thing.

    With almost all goods coming onto the island it is far easier to tax them at the ports than some complicated VAT. Encouraging a bit of local farming and such by not taxing it is a good thing in my opinion.

    I am happy to see that he thinks personal and corporate income tax are "relatively poor taxes". We know how to form corporations in taxhavens and hide our profits if we need to. And cash transactions just won't be reported. Percentage of cash transactions would go even higher. I too think that would be a bad type of tax.

    TCI and Anguilla have similar economies, which are both very different from normal European countries. Putting a European tax like VAT on us would not be good. The hotel, work-permit, restaurant, land-transfer taxes work well here and would not be good for England.

    I hope and expect that Hubert mostly ignore what this guy writes in his Anguilla report.

  14. The last 3 anonymous posters are on the money. I also feel bad about Don recommending VAT which shows he is a brilliant copycat of the US and UK which just happened tobe leading in the debt around the world. Mr. Roe should not be entertainded mainly because he does not fully know as stated above we are a high indirect tax place. We have hidden government tax in everything, Plane tickets, cable tv, all items bought in store through duties, social security (where I think it is about time the government use it for as it is 'income tax undercover'payout is useless and only women benefit), electricity.

    It ain't broke so why change it. What really needs to be address is the high contracts offered to persons falt being placed solely on Human Resources which have been sleeping for many years and would better benifit if they close doors. Retract the past minister owned salary increase which is ridiculous of 33,000 a month. Get proper evaluation for project cost not sure they getting value for money. Also, revalue the land deals which is now on a high decline. Utilise government workers training which was paid by the government instead of bringing in consultants. This will help bring the expenditure side way under 130 Million so we will start to run suppluses.

    reality check stop looking at US and UK first and second debt countries for solutions. It is hard to get into recession but easy to say you out.

  15. Completely off the subject... why do you have the weather for Anguilla St. Croix on this blog ? Does Bunton read this blog every day.

  16. Someone has just advised me that the Anguilla I'm posting the weather for is where the St. Croix landfill is located, near the Krause Lagoon, southwest of the Hovensa refinery! Hopefully, I'll find the right one soon.

    My initial concern about the accuracy of the weather location was stilled by the errors in the "Ligit" widget just below the number of visitors to the site. If you click on "Recent Readers", you will find that most of them appear to be from South Hill, in None, Alaska!

  17. everyone that lives, visits should have a read
    tourism in the caribbean....by david timothy duval.....

  18. The TCI report advocates simplifying tariffs, reducing them, and getting rid of exceptions. I think this would be good advice for Anguilla. There is a huge book that most of us never see, and the customs agents pretend like they know, with thousands of items and their rates. Different times I have been charged different rates for the same item. It is so complicated that there is too much room for interpretation. And we have no way to prove when they are charging us too much. Not the ideal system. I would like to have a much smaller number of different rates, posted on a web page, that everyone has to pay. No exceptions for rich/billionaire developers when poor little me has to pay the tax on stuff I bring in.

  19. Early advocates of what they call "Caribbean unity", now represented by such persons as Haydn Hughes and Wilmoth Hodge who recently called for full membership in CARICOM, were what caused us to originally adopt the complex and irrational Unified Tariff. It was designed to protect industries in other Caribbean islands. I guess that would be fine if Anguilla had oil refineries and bauxite mines, but what we have instead is a mess that few people understand and as the above poster says, Customs officers pretend to understand.

    The end result is that duty is imposed on a child who wants to be part of the modern world by buying and learning about a computer, but is encouraged to buy a pick and a hoe, which attract no duty.

  20. If a politician has the power to give a developer a pass on paying customs taxes, then the developer might be able to save millions by paying a bribe. It is far better to not have this possibility. Nobody should be able to get a pass on customs taxes.


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