| Chamber criticizes tax increases to balance budget | | Print | |
| Written by Richard Green/richard@fptci.com | |||
| Thursday, 08 December 2011 10:25 | |||
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The Turks and Caicos Islands interim government’s decision to balance the budget with even more tax increases might create “a catastrophic backlash on the horizon which may actually stunt, retard and discourage business development or investment in these islands,” says a position paper by the Providenciales Chamber of Commerce. More taxes now will increase inflation and make the situation even worse for small businesses, the backbone of any expected economic growth, the paper says. The chamber says the government hasn’t sought the expertise of the chamber and wider business community in making many of its decisions, leaving matters to the Consultative Forum and Advisory Council. “We request that the government take urgent action to partner with the Chamber of Commerce so we can work together to achieve a sustainable economic recovery in the TCI,” the paper says. The chamber sent its paper to U.K. Department for International Development Minister Alan Duncan, who is visiting the TCI this week. “I don’t share its one-sided view of what’s necessary for restoring the economic fortunes of the islands,” Duncan said Dec. 5. “Some drastic things have to be done here in the same way they’re having to be done in the U.K. itself and many other countries across the world. You can’t just stimulate an economy to just pick up again when the problem is the bursting of a (construction) bubble and a mountain of debt.” “The Chamber of Commerce might say, ‘Oh, reduce taxes and all that kind of stuff.’ We don’t have that economic elbow room. The best thing for getting construction going and for attracting investors is to make sure that there is an absolutely clear, stable economy in which people can take investment decisions.” “We’re doing it in the U.K., and nobody likes it,” he said. Among suggestions from the chamber is reform of the immigration department, which is already underway by the interim government. But the chamber adds the suggestion of selling 50 citizenships a year for $200,000 each plus the requirement of purchasing property worth at least $2 million to raise revenue. The paper also recommends deregulation of electricity and renegotiating the government’s contract with FortisTCI that has “preposterous” renewal terms. Fortis also should be required to allow those using solar power to connect to the grid and feed back power they don’t use. Fortis also should build an electricity generating incinerator or allow a private contractor to do it, the paper says. “FortisTCI Ltd has always been predisposed to meeting with the Chamber of Commerce, and has done so on several occasions,” said FortisTCI CEO and President Eddinton Powell. “We are therefore a bit surprised that the company was not given the opportunity, as a Chamber of Commerce member, to give our input as it relates to electricity deregulation before the recommendations were submitted. “We are prepared to meet individually or corporately with chamber members. We are also prepared to discuss and debate the state and future of the electricity business with anyone in the TCI. We are a facts driven organisation.” The paper said government also should seek to diversify the economy, promoting industries like software development and financial services. The latter has not been promoted but instead subjected to several tax increases that are negatively impacting business, the paper says. “The government should immediately determine the qualification of the members composing the Financial Services Board and make changes to provide a better informed board,” the paper says. “The current director of the Financial Services Commission is not respected by any member of the professional financial community and should be replaced immediately.” When the fp asked Director Kevin Higgins about that statement, he said, “I have no comment. They’re free to say whatever they believe is true.” The chamber offered to assist the government in job training for hundreds of civil servants who will be losing their jobs in restructuring of the civil service. And government should approach local resorts about expanding to other islands in the country. Click here to read the chamber's position paper
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