Taxes

When our property rights cease to exist:  We are looking at our constitutionally protected property rights under the 1982 Anguilla Constitution.  We have seen that section 7 enshrines our fundamental right to the ownership of personal property.  The Constitution goes on to set out a number of exceptions to this protection of our property rights.  The first and most obvious one is where we are obliged by a law to satisfy any tax or rates.  If the House of Assembly passes a law that we must pay house tax, we cannot complain that this is a confiscation of our property.  In our case, we have the Valuation and Rating Act which sets out government's right to calculate our annual property tax.

So, in addition to the government’s right to have parliament pass a law to take away our property, with compensation, there is also a standing series of laws that impose taxes, licences, and rates on us.  We must pay them, or pay the penalty.  The Constitution says they are not an infringement of our rights.

Taxing

The big question is, will Alan Roe’s visit to Anguilla result in increased taxation?  The short answer is that, if it does, it will have to be imposed by us, implemented by us, and paid by us.  Of course, he might well make recommendations for removing some taxes, as well as bringing in others.  Hopefully, we will get to see his report at some early point, ie, if the Government of Anguilla puts it on its website, like the Turks & Caicos government already did.  I believe that Governor Harrison has the right ideas about transparency.  Hopefully, it will be up to him whether the GoA goes public with the draft report.

Even then, Mr Roe’s output will only be a set of recommendations.  They will not be binding.  It will be for the politicians and their technical staff to decide whether his report should be implemented. 

Whatever changes he recommends, would it not be better to collect what is out there first?  We know that many residents, local as well as non-local, have been evading existing taxes for years.  Over the past 25 years, the preferred way of doing business in Anguilla has been to encourage the employment of local fronters to negotiate exemptions from taxes on the basis that they were “local” businesses.  Every sort of enterprise in Anguilla was available, if the price was right and so long as the privileged few got their share of commissions and the famous “ten percent”.  Social Security contributions, accommodation tax, property tax, customs duties, planning prohibitions, hospital bills, electricity bills, and water bills, were all ignored with impunity on the basis that the Anguilla Government would not “criminalise” the ordinary Anguillian.  Who knows, but there may be tens, perhaps hundreds, of millions of dollars in uncollected revenue out there waiting for an efficient collector to come along.

Whatever new taxes are proposed, they better be cost-efficient.  No point in proposing to raise $100 if it costs $200.00, or even $50.00, to collect.  Income tax and company tax would be subject to the problems of all small-island economies.  The tax inspector and tax collector would be a family member or friend of the tax payer.  With no audits required in this economy, everyone will lie.  Those who can shift their income overseas will do it.  Less cash will circulate, and the economy will shrink. 

What about rationalising revenue heads?  Out of the 150 existing ones, only about 5 of them bring in 90% of all GoA revenue.

Will imposing a Value Added Tax really encourage Anguillians, as has been suggested, to go to St Maarten and buy there in order to bring in the stuff duty-free?  Given that merchants will have lower landing costs (if Customs Duty is removed at the time VAT is introduced), there should not be such a major increase in the sale price of goods as to make overseas purchasing worthwhile for the average household.  Of course, we cannot see the guys selling BBQ food in The Valley charging 17.5% tax, nor the fishermen. 

If our revenue depended on taxing businesses like those we would be in really serious trouble. 

Sweeping

The new administration has got to raise revenue and reduce costs. I figure they need all the help they can get. I make the following suggestions for increasing revenue starting with the most obvious and least controversial.

           'Sin taxes' always receive public approval and approbation. No one would object to increasing the duties on tobacco and alcohol. Anguillians consume far too much alcohol, anyway. It would be a significant health measure just to triple the duty on spirits, wines and beer. Tobacco is hardly a problem in Anguilla. Increased excise duty will make it even less so. And, don't forget lapdancing salons, cockpits, and dogfight rings. No more turning a blind eye to the main chance to maximise revenue!

           Collect property tax from the thousands of householders who have refused to pay it. Do not forget the fines associated with late payment. There is no need to prosecute everyone, an example of one or two prominent citizens should result in a flood of homeowners rushing to pay up. Perhaps, the Hon Mr Hubert Hughes can volunteer to be the guinea pig? That would be a real show of leadership.

           Disconnect the thousands of illegal water connections and prosecute the offenders for having stolen water. I do not approve of my tax dollars going to subsidise certain well-known North Valley and South Valley business men using the public water for free.

           Enforce the accommodation tax laws. Visitors to Anguilla pay the bed tax, and certain well-known local and foreign hotels have failed ever, and I mean ever, to pay the public revenue collected by them on behalf of the public into the Treasury. This is a form of licensed stealing, so long as Government continues to condone it.  If I were a law abiding hotelier, dutifully paying my bed tax into the Treasury every month, I would be particularly offended.

           And, please, don't tell me any stupidness about not wanting to “criminalise” poor Anguillians. These not-so-poor Anguillians have done it to themselves, no one is doing it to them.

           Remember, the new broom sweeps cleanest!

Consultants

Adapted from Julian Cairns-Wicks' column in the St Helena Independent a week ago:

Curtis & Leroy saw an ad in the Starkville Daily News Newspaper in Starkville, Mississippi, and bought a mule for$100.  The farmer agreed to deliver the mule the next day.  The next morning the farmer drove up and said, “Sorry, fellows, I have some bad news, the mule died last night.”

Curtis & Leroy replied, “Well, then just give us our money back.”

The farmer said, “Can’t do that. I went and spent it already.”

They said, “OK then, just bring us the dead mule.”

The farmer asked, “What in the world ya’ll gonna do with a dead mule?”

Curtis said, “We’re gonna raffle him off.”

The farmer said, “You can’t raffle off a dead mule!”

Leroy said, “We shore can!  Heck, we don’t hafta tell nobody he’s dead!”

A couple of weeks later, the farmer ran into Curtis &Leroy at the Piggly Wiggly grocery store and asked, “What’d you fellers ever do with that dead mule?”

They said, ”We raffled him off like we said we wuz gonna do.”  Leroy said, ”Shucks, we sold 500 tickets fer two dollars apiece and made a profit of $898.”

The farmer said, ”My Lord, didn’t anyone complain?”

Curtis said, “Well, the feller who won got upset.  So we gave him his two dollars back.”

Curtis and Leroy now work as taxation consultants and will be coming to Anguilla this month to advise us on diversifying our revenue base.

Foot Report

Foot Report published.  The final report of the independent review of British offshore financial centres by former Bank of England official Michael Foot was published today.  You can download the entire report here.

It had been commissioned by the British Government in December 2008.  His mandate required Mr Foot to work co-operatively with the various governments to identify opportunities and challenges generated by turmoil in the financial markets and the subsequent impact on the world economy.  Readers will recall the news item on the visit of Mr Foot to Anguilla in June of this year as reported in the Anguillian Newspaper.  The final report has been awaited with some trepidation in the Overseas Territories financial centres.

In the event, we need not have worried that he would be unreasonable.  I have had a look at the report, and it contains nothing draconian or unexpected.  In fact, it is so reasonable that some European income tax specialists are complaining that it is too wishy-washy.  I suspect that what has these European tax-them-into-submission crew outraged is that Mr Foot is not insisting that the Overseas Territories implement income tax measures or take any mandatory draconian measures.

He takes aim at US tax havens such as Delaware, low British and European compliance with their own standards, and sloppy work by the FATF. 

He does point out that we are going to have to bump up our taxes to meet the drop in government revenue resulting from the economic downturn, if we are not to reduce the public sector services or personnel.  There is nothing new in this recommendation.  However, he leaves it open to us to decide how we are going to achieve the needed increase in revenue.

All-in-all, I consider it a fair report.

Statistics

The Statistics Department of Anguilla is on a media blitz.  They have just launched a statistical booklet titled “Anguilla Facts and Figures 2009”.  All this in celebration of Caribbean Statistics Day.  The story being touted to the press is that the Deputy Governor, the Minister of Finance and the Attorney-General attended a “small gathering” at the Teachers’ Resource Centre to launch the booklet.  Now, I ask you to read this and understand.  Allegedly, the goal was “creating the environment for sustainable standards of living for the people demands proper policy making and macroeconomic management informed by sound statistical information”.

What the heck does that mean?  I submit the following translation:  “Fill out those forms we send you every year so we can decide how much to tax your backsides the following year!”  That, I suggest, is all that these exercises are about.

Anyway, apropos of nothing, a few days ago I happened to be wasting time trolling though the Anguilla blogs when I came upon this one produced by the Statistics Department.  Just in case you are not sufficiently interested to click on the link provided in the last sentence, let me explain.  It is a Blog published by the Statistics Department promoting the upcoming 2011 Population Census.  Other than the fact that they stole my template, there was nothing offensive about it. 

Just that it appears to have died the death of abandonment.  The only entry the Statistics Department has chosen to make on the Blog about the importance of the 2011 Population Census was that one announcement of 24 June 2009. 

There is absolutely no other press release or announcement on the Blog. 

There has been no follow-through since this first June posting.  There is not a single comment, other than some idiot spammer from Greece. 

There has not, so far as I know, been any encouragement to the public to use the Blog.  Maybe it was just a failed experiment?

So, I contacted them using the comment feature online.  I wanted to know if this was it.  Was there no plan to use the Blog effectively?  Would there be no follow-through to the initial article?

That was two days ago.  Response:  Nil.

Typical of government?  No, just of statistics.  Statistics are for government to use or misuse as they want:  “We are here to serve the purposes of government.  The interests and enquiries of the public are nothing that we intend to waste time on dealing with or answering.”

Flag Revival

Robert FX Sillerman’s back!  He may have told everybody that he has no talent in real estate.  But, he sure has talent for dealing with the government of Anguilla.  His team has recently put together a 30-page marketing presentation to persuade investors to take over the Flag Luxury Resort project in Anguilla.  The presentation reveals that in July of this year he concluded a terrific deal with government.  It brings him back in charge of Flag, and has breathed life into this failed project.  He is using this presentation to invite new investors in the Flag project.  The presentation tells us a number of things.  For one thing, from the cover we learn that the new project will be called Temenos Resort, Anguilla. 

1. Note the particularly disturbing news that we are now being described as “Anguilla, a British Protectorate”.  The last British Protectorate I know about was Palestine, and look what happened to that unhappy territory.

 

2. Page 3 reveals that it is really the same old project completely unchanged.

3. Page 4 indicates that the new investors will acquire $180 million of ‘first and second lien’ debt for $100 million.  No doubt that is clear to our US cousins.  Since “first and second lien debt” has no meaning in Anguillian law, I have no idea what they wanted to say.  I suspect they meant to say that Credit Suisse, and perhaps Sillerman himself, are selling out their charges cheap. 

 

Most extraordinarily from the same page 4 we learn that the “owners” have recently concluded negotiations with government for “a 25 year bed tax concession” which we learn is worth $98 million over the same 25 years!!  We knew about the tax concession, but now we learn the amount of the give away.

4. From page 8 it appears to be the same project.  It is just being refinanced.  With us giving them $98 million of public revenue to sweeten the deal!  No question of one acre of land being refunded.  I am glad we do not take responsibility for the golf course, as government was proposing at one time.  But still . . . accommodation tax is supposed to be a major part of our revenue.  Government has given up collecting it for 25 years.  How are they going to pay their public servants and other obligations?

 

5. Page 15 reveals that delivery of the first Temenos villa will occur in the last quarter of 2009.  Delivery of the last will be in the second quarter of 2010.  The hotel will be completed and opened in the last quarter of 2010.  So, it looks like full steam ahead.  Just in time for the upcoming general elections.  

There is one worry.  Since the US economy is not expected to turn around until the last quarter of 2011, I am not sure who is going to come forward to make this happen.

 

6. Page 16 is quite revealing.  It states that Mr Sillerman enjoys “a great deal of local support for the project”.  I have no idea what local support he could be referring to.  I rather thought that both Government and Opposition had publicly and repeatedly washed their hands of him.  

Anybody remember the Chief Minister’s actual words the last time on the subject of Mr Sillerman? 

 

Did you catch the bit at page 16 that Mr Sillerman has been granted permanent residence status in Anguilla?  The brochure claims this “is quite unusual for a non-native of the island”.  That is surprising.  I always thought that it was a precondition for being granted permanent residence status that you had to be a non-native.  I was also under the mistaken impression that every foreigner who bought a flat or apartment was more or less automatically granted permanent residence status.  Permanent residence status was invented by Ronald Webster back in 1980 as a convenience for every foreign home-owner not to be asked harassing questions by the youngsters of the Immigration Department when arriving in Anguilla to spend the winter.  Each person who buys one of the villas will be entitled to apply for permanent residence status.  Although, since government abused the status to additionally give citizenship rights, I hear they may be stopping it.  Is Sillerman mamaguying me, or what?

7. Page 22 contains some vital figures.  It calls itself “Key Financial Data”.  From it, we learn that some $200 million has to be raised to bring this project to completion.  We also learn that it will take the trivial figure of $40 million to buy out the existing lenders.  Credit Suisse has obviously agreed to lie down and play dead in exchange for $40 million.  Any takers?

 

It looks like the government of Anguilla was not joking when they announced a few months ago in the House of Assembly that they were thinking of ways to bail out this project.  Have you any idea what US$98 million represents?  That is more than a quarter of a billion EC dollars.  Some bail out!

No doubt, this development will be presented as a major triumph for the party in power when the upcoming elections are announced.  But, why have they been silent about the figures up to now?

Who said Mr Sillerman knew nothing about the real estate business?

Income Tax

The Foreign Office is reportedly demanding that Cayman Islands and Anguilla impose

income tax on its citizens in return for permission to increase borrowing to meet October’s public service salaries.  I was interested when a correspondent sent me a link to a recent Guardian Newspaper article by Nick Mathiason.  He reports that the income tax stand-off is the main stumbling block in the way of both island-countries being granted permission to borrow.  And, borrow they must if public service salaries are to be paid in October.  The Treasury coffers are empty.  In the case of Cayman Islands, public school-building projects are already being shut down for lack of payment for work done.  Anguilla cannot be far behind in defaulting on obligations to contractors and other creditors. 

  

The British are apparently playing hard-ball and refusing permission to borrow unless income tax is introduced.  I say ‘apparently’ because our government has kept us completely in the dark as to the details of the negotiations with the FCO, and the reason for lack of any sign of progress to date.  We do not know what conditions the British have laid down to agree to more borrowing by the Government of Anguilla.

I well recall that in the year 1978 the GoA was studying options for increasing employment opportunities and revenue streams.  The then Chief Minister set up a small committee to consider the international financial services industry.  The committee strongly recommended that government should support the development of the industry. 

Government was also at the time studying the option of income tax.  That option was rejected.  Instead, that same year, the Income Tax Act which had lain dormant since the Anguilla Revolution of 1967 was amended by an Act of the House of Assembly to permanently suspend the collection of income tax in Anguilla.  I seem to recall that the Income Tax Act was subsequently repealed, though don’t quote me on that.

The economics were simple to work out.  With a population of some 6,000 persons, there were at that time probably a total of 1,000 employees on the island.  Most of them were government public servants.  It did not make sense to set up a government Income Tax Department to collect income taxes from mainly government workers.  That would be like taking money from one pocket to put it in another.

Government at that time made a deliberate decision instead to impose indirect taxes as a low-cost method of raising revenue, rather than go for the expensive and unwieldy mechanisms that would be required to police and collect taxes on income. 

Now, thirty-plus years later, a great deal has changed.  In particular, we probably now have a population of 12,000 souls, at least 2,000 of whom are employees receiving a pay-cheque from both government and private employers.  There are probably another 1,000 self-employed accountants, building contractors, carpenters, fishermen, lawyers, and shopkeepers.  

No one at present pays one penny in direct taxation.  Anguillians instead pay a host of duties, licences and fees on such a wide range of goods that Anguilla is one of the most expensive places in the West Indies to live in.  All we are missing is a tax on services.

Has the conclusion made in 1978 about the cost/benefit ratio changed in any significant degree? 

In other words, would government receive any real revenue if it were to impose an income tax on Anguillian employees? 

Would our Inland Revenue Department be able to impose and police an effective income tax on self-employed persons without a massive investment in new personnel and equipment? 

What would be the likely impact on Anguilla’s already fragile economy as residents begin to take both avoidance and evasion measures?

What would be the political fall-out when Anguillians wake up to find that all the major players in the local economy have been granted 20-year income tax holidays, while the common man is caught in the tax net?

I don’t suppose the British could care less. But, our politicians certainly do.

This time they are right to resist British pressure, even if for the wrong reasons.  It would help us all to be more confident if they would release the appropriate studies they must have had done on the ineffectiveness of introducing income tax.  They must have made such a presentation to the FCO in the last few months.  It would be the easiest thing to publish the data.  Why keep it all so secret?

They do not have the option of borrowing from the local banks without FCO permission.  The result of such an action would be an immediate falling away of public confidence in the integrity of the local banks, and a run on them that would make the run on Stanford’s bank in Antigua a couple of months ago look like a trickle.

Not that I am worried.  I rely on the Governor of the Eastern Caribbean Central Bank to speak firmly to the Chairman of the Caribbean Commercial Bank and the General Manager of the National Bank of Anguilla.  I rely also on the external auditors of all three to speak even more firmly to each of them.  Then, there are the two Boards of Directors.  There must be someone with backbone and integrity among all those prominent entities.

Related Posts:

Green Light

Approvals

Borrowing

Borrowing

FCO Turns Down Anguilla Request to Extend Borrowing Limits. Well, we all heard Minister Banks speaking at the Chief Minister’s Weekly Press Conference this week. I cannot pretend to quote him exactly. However, he tells us in essence that the British turned down his plea to permit us to borrow more money. His proposal was that we be permitted to borrow a large amount of money to take us through the present recession.

We recall that just a couple of months ago the government persuaded the House of Assembly to approve issuing some $200 million in bonds. It was not so difficult to persuade the House. After all, of the 11 voting members of the House, only 2 are in Opposition. The British would be well aware of how farcical such an approval is.

Then our brilliant leaders discovered they needed Auntie’s approval to make the borrowing that had just been approved. So, off they went to London, expecting it would be a breeze. After all, everybody knows what good businessmen they are. How could anyone in London doubt the seriousness of their proposal? Especially when there are general elections due in six months’ time. Surely the politicians in London would understand the exigencies of the situation?

Well, there was just one question. How are you going to pay back the money you plan to borrow? You are not going to leave it to the British taxpayer to bail you out, are you? Oh, you have no plan! A hurricane may strike next month and set all your plans aside? Is that any reason not to have a plan for paying back the borrowing? Do you go to a bank to borrow and not come with a business plan showing how you expect to be able to repay? Is getting permission to increase borrowing any different? Of course it is not!

And, Hubert is so right. Government has just given away one of its main sources of revenue. And, apparently, to people who were not even asking for the gift. First, they announced that they were going to bail out Flag Luxury Resort by taking over the white elephant golf course in exchange for all the bed tax and aliens landholding revenue from that real estate development project. For the next thirty years! Then they announced that they will severely cut the taxes for Viceroy. Then, they will severely cut the taxes on real estate transactions with all foreigners until further notice.

Anguilla made its reputation as a destination of choice through its little up-market boutique resorts. We risked destroying that market by permitting mega-resorts like Flag and Viceroy. We said we were doing it for two reasons. One was we needed major new employers for our burgeoning population of school-leavers who were entering the work force. Secondly, we needed the revenue that the sales would produce. To hell with boutique and with up-market. It is a question of jobs.

Well, we permitted Flag and Viceroy to import massive amounts of cheap Asian ‘slave’ labour, resulting in minimal local employment. Then, we astonished them by gifting them with the opportunity to unload their over-priced units free of all sales taxes. Our explanation? We thought it was an excellent initiative to stimulate the economy!

No income. No ability to pay back borrowings. No way.

TIEA

Tax Information Exchange Arrangements. The Chief Minister and the Minister of Finance, with assorted public servants and hangers-on, have gone off to London to negotiate an increase in Anguilla’s permissible borrowing facility. For some reason the FCO retains a brake on the borrowing ability of the Overseas Territories. Anguilla is now reaching the uppermost limit of its borrowing, and the government ministers need an increase if they are to maintain the high level of government expenditure they had planned in the immediate period before the general elections due early next year. That negotiation is what they told us the trip to London was about.

Someone has just brought to my attention the following article published on the website of HM Revenue in London. The Chief Minister has signed a Tax Information Exchange Arrangement with the British Government. My correspondent asked me whether it had received much publicity in Anguilla. He enquired if I had any reason to believe that the Bar Association and the Anguilla Financial Services Association were consulted on what impact it would have on Anguilla? The answer to both questions is no, I very much doubt that the Chief Minister consulted with any of the relevant stake holders before he signed this Agreement.

I doubt even the Ministers of government, including the Minister of Finance, had the faintest clue that it was going to be signed.

Revenue probably presented it to him at a briefing, and he would have said, “Okay, just let me sign it while I am over here.”

That is how we run government in Anguilla.

Armageddon

The EU Savings Tax Directive. I am out of the international financial services business now. I sold the company management part of my law practice in 1998. So, I am really out of touch. But, a recent gloating post by a ‘tax em or hang em’ guru about the coming Armageddon for Anguilla and other BOT financial services centres got under my skin. When that happens, I am compelled by a personal character weakness that I have previously admitted to to say something.

If you want to live in a jurisdiction where you are molly coddled from the cradle to the grave, live in the UK or another European jurisdiction. And, pay the high taxes that go with the safety nets. If you enjoy the freedom of living in one of our frontier societies, such as Anguilla is, are willing to put up with the lack of social services, but bank your total pay package at the end of the month with no deductions, then you live in an offshore financial jurisdiction, such as Anguilla is. You probably make your living providing corporate and other structures for international financial planners who service clients with international business who are taxed in high-tax jurisdictions. In Anguilla, we lead a tax-free life, in a hurricane-prone environment. We do have 5% deducted from our Anguillian salaries for social security payments, but the benefits are so ludicrously small as to be insignificant.

So, back in 1999 when the Europeans dreamed up the EU Savings Taxation Directive, we were not too concerned. Its main purpose was to allow the tax authorities in EU Member States and associated territories to share information about interest payments made to individuals. This was to help ensure savers and investors paid the right amount of tax on their savings income and to counter cross-border tax evasion within the EU. It only applied to individuals, not to trusts and other ‘offshore structures’.

The Directive set up two systems. One was an “information exchange” regime, whereby all participating countries agreed to report interest on savings paid to citizens of other EU Member States to those States’ tax authorities. The other was a “withholding tax” regime, whereby the identity of the recipient of interest is not reported, but a small tax (15%) is paid in the offshore centre and the balance remitted to the EU Members State in a lump sum so that the tax authorities are not informed of the individuals who paid. Countries with a tradition of banking secrecy, eg, Austria, Luxembourg, Belgium, and Switzerland, chose the withholding system. So did the Netherlands Antilles and the BVI. Anguilla and the Cayman Islands opted for the exchange of information regime.

Over the years, negotiations between the offshore tax jurisdictions resulted in an agreeable compromise whereby only interest income earned from certain savings and bonds came within the scope of the Directive. Most income remained safely sheltered so long as you used a jurisdiction like Anguilla. As Charles Hermann of KPMG in Switzerland explains, the Directive was so full of holes that investors simply readjusted their holdings to continue to legally avoid taxation. Furthermore, the Directive had the opposite of the desired effect of bringing investors’ money ‘back home’. Some of the most fearful investors simply placed their money far offshore in safe jurisdictions such as Singapore and Hong Kong.

Now, on 13 November 2008, the EU dropped a bombshell. They have amended the Savings Tax Directive. The intention is to close existing loopholes and better prevent tax evasion. The previous Directive only applied to payments to individuals. Anybody who transferred the money they held on deposit into either a company or a trust immediately avoided the disclosure or tax obligation. Some Swiss banks were bulk buying up to 10,000 BVI and Panamanian companies at a time. Interest payments which are channeled through previously tax-exempted structures will now be caught in the net. Companies, IBCs, corporations, limited liability partnerships, foundations, trusts and the like will all come within the scope of the Directive. Innovative financial products, even life insurance, will not escape.

The impact on West Indian offshore centres, including Anguilla, may well be radical. Local banks will be obliged to look through the company, foundation or trust that is recorded as the legal owner of the account to which the interest is paid and treat the interest as having been paid to the beneficial owner of the organization. They will be obliged to use the information held on their files for anti-money-laundering purposes to identify the real human person who benefits from the structures created in the tax haven location. The ‘reform’ is no doubt intended to kill a substantial part of Anguilla’s international banking business.

The other side of the coin is that the high-tax countries who have created this bomb-shell will not gain one penny extra in tax revenue. What is more likely to happen is that, if they implement the Amended Directive as indicated, the investments presently held in Anguilla and the BVI will soon be heading to Hong Kong and Singapore. Talk about shooting yourself in the foot!

Business Licence

No, there Are No Licences Required in Anguilla for Doing Business. I cannot believe it. A civil service friend of mine contacted me recently. He had been told that he had to get a business licence to continue to do his photography business. He has a good camera. He tells me that he has been taking photographs for years. He has started to earn some money from his hobby. He does not have a photo studio, just his home. He does not have a sign outside his home advertising that he is doing business from there. He has no studio in his home. All his advertising is by word of mouth. He has got some real lucrative commercial work recently. Word has got back to the Inland Revenue. Someone in his department tapped him on his shoulder and told him that questions were being asked. Did he have a business licence? If he did not get a licence he was going to get in trouble! So, he had gone to Inland Revenue and paid for and obtained the licence. It cost him about US$1,000.00. He has been told he has to renew it annually.

He asked me the question. Did he need a business licence to do what he was doing? The answer is a resounding NO! There is no licence required for doing business as such in Anguilla. There never has been.

About 20 years ago, Lawyer Fred Kelsick tested the law. Fred Kelsick was a St Kitts lawyer. He has died now. He used to come to Anguilla to represent his clients in court and give advice and other legal services. Charlie Gumbs of the Quarter was his agent. You made appointments by contacting Charlie to find out when Mr Kelsick was coming next to Anguilla. Mr Kelsick interviewed his clients outside the court house, under the loblolly tree that is still there. That was the old court house, which we now know as the “Statistics Department”. The police served a summons on Mr Kelsick. It had been approved by the Attorney-General. The charge was for working as a lawyer in Anguilla without a business licence contrary to section 3 of the Trades, Businesses, Occupations and Professions Act. I do not remember who the Magistrate was. He threw out the charge. The Magistrate ruled that you don’t need a licence to do business in Anguilla.

You do not have to be a lawyer to see why he threw out the charge and told the police not to harass Mr Kelsick. You only have to be able to read a simple sentence. Section 3 of the Act reads:

Obligation to obtain licence to carry on certain trades, businesses, occupations and professions

3. Every person carrying on any trade, business, occupation or profession set out in the Schedule shall take out an annual licence in accordance with the provisions of this Act in respect of each premises or place where such trade, business, occupation or profession is carried on, and shall only carry on such trade, business, occupation or profession from such premises or place.

It should be obvious. The licence is in respect of “each premises or place where such trade, business, occupation or profession is carried on”. If you set up an office in your home, advertise it, and have customers come to your home to conduct the business, it is arguable that your home is a place of business. But, if you only practice your profession in a public place like a courthouse, and interview your clients under the loblolly tree, then you do not have a place of business that can be licensed. Nor do you have to.

The late Clement Daniels used to have a retail business called Galaxy Shoppe. It had two outlets. One was at Wallblake. He had another branch at The Valley where Brodie runs his retail outlet. He had two places of business. He had to obtain two licences under the Act.

My friend does not have a place of business. What he is doing does not require a place of business. He goes out on assignment to take photographs. He is photographing a wedding at a hotel one day, at an event of one kind of another at a different place the next day. The Act goes on to say that if you do have a licensed place of business, you cannot open additional branches all over the island. If does not say that you cannot carry on a business without having a licensed place of business. Do you think that my friend needs a licence?

Well, do we need an Ombudsman in Anguilla, or do we not?

I told my civil service friend I hoped he had permission from the Governor to be doing an outside business. But, that is another story.