Last month, the UK’s Minister for the Overseas Territories, Mark Simmonds, rebuffed a request from the Turks and Caicos Islands’ new Premier, Rufus Ewing, that the implementation of the islands’ new value-added tax regime be deferred to allow time for the development of an alternative. He suggested that the islands review the regime in April 2014, a year after it is implemented.
The suggestion to “review” the VAT after one year is laughable. Sort of like asking someone to review their heroin usage after a year of addiction.
For those of us anchored in the real world, the only way to stop the VAT is to block it from ever being implemented. Because once politicians get hooked on a new source of revenue, there’s almost no hope of getting them to voluntarily relinquish those funds.
All that being said, I’m not a fan of the TCI government. Just like happened in the Cayman Islands (discussed in detail here), the government of the Turks and Caicos Islands spent too much money and put too many people on the payroll and paid them above-market wages (gee, sound familiar?).
They got in financial trouble, which led to intervention by the mother country.
But getting help from England on fiscal policy is like asking for dining advice from Hannibal Lecter.
The old TCI government was guilty of overspending, and now the U.K. thinks the answer is overtaxing.
I hope the new TCI government is able to somehow thwart the VAT. But if they’re serious about stopping that odious tax, then they better take some genuine steps to restrain government spending and prune bureaucratic expenses.
I’m not sure what lesson we have for the United States, other than the fact that we should fight to our last breaths before we let this awful tax get imposed in America. This video has more details.