Address to the Nation - June 20, 2011

Fellow Anguillians, you are aware that from the onset of the introduction of the Interim Stabilisation Levy Bill in the House of Assembly in April 2011, my colleague the Hon, Othlyn Vanterpool, the leadership of the AUF ,myself --- and in fact the entire AUF organization have voiced objection to it. We see it as a BAD TAX that is unfair and inequitable and should be repealed. In light of this, on April 14, 2011, I requested of the Speaker through the Clerk of the HOA to convene an urgent meeting to debate a motion to repeal the ACT.

In my letter, I presented the strongly held position by the Anguilla United Front that it was “impossible to implement the Levy in a manner that would be fair to all concerned”. It was our position then, that with two weeks remaining it would be possible to begin a process for repealing the Levy by first presenting a motion in the House of Assembly to debate the merits of such an action. It was our hope that such a process could provide the Government with an opportunity to get the full backing of the House to make the case with the British Government that the implementation of the Levy was creating issues of unfairness and inequity and should be repealed. The motion also included a resolution to establish a broad- based Tax Commission “to undertake a comprehensive review of Anguilla’s Tax regime by the end of June 2011.”

The Speaker did not respond to my request. However, the Chief Minister made some unfortunate statements in an interview with Radio Anguilla regarding my letter. Mr Hughes’ statements in this interview as well as on a broadcast I heard on Klass fm on April 28, were misleading to say the least. But perhaps, can be more accurately described as outright lies.

The Chief Minister in his interview made a number of statements that prove that he is either the recipient of bad advice or that he is not using his legal advisors effectively.... His comments suggest that he does not understand the Constitution under which he is operating neither does he understand his role as an elected official and a member of the Anguilla House of Assembly.

Fellow Anguillains, after failing to get the Speaker to call an urgent meeting of the House to debate the Repeal of the Interim Stabilisation Act, I wrote directly to the Chief Minister as leader of Government business on May 4th 2011, requesting that he takes all necessary steps to repeal the Levy as a matter of priority and urgency. He replied to my letter on the same day... A reply that was nothing short of a disgrace and an insult to the people of Anguilla, coming from the leader of government business. His reply was two lines and read as follows, and I quote:

“Your letter of today's date has just been referred to me and I have read it with interest.

As you should be well aware, your letter should be addressed to His Excellency, the Governor.”

This response from Mr Hughes is a clear indication that he is a leader who has abdicated his responsibilities as Chief Minister to the Governor and/or Secretary of State. It is interesting how, Mr Hughes, a leader who for more than forty years has spoken about championing the cause of ordinary Anguillians, is now refusing to support an important initiative to represent the same Anguillians he claims to love so much.

It must be pointed out -- that the Chief Minister has lost an opportunity to prove his claim that the Levy is a British Tax...... If he had joined with us to make the case for its repeal and the Secretary of State then decided not to give it his approval or assent he would have been in a very strong position to make the statements that he is now making.

Fellow Anguillians instead of this, Mr Hughes continues to speak about three things in relation to the levy. He is doing so in a deliberate attempt to mislead the people of Anguilla........ I will now address what he has being saying and take you through evidence that reinforces the point that Mr. Hughes should not be taken at his word and that we should not allow ourselves to be fooled by him again. Firstly, ,,,Mr Hughes continues to lie that it was the British who set the time frame to balance the budget and that it was non-negotiable. The truth is, it was Mr Hughes and his AUM/APP government who set the time to three years. In a letter dated January 19, 2011, to the Hon. Henry Bellingham, Minister for Overseas Territories, Mr Hughes stated on three occasions that he wanted three years, 2010 -2012 to balance the budget. On page 3 of the letter Mr Hughes writes: “My Administration came to the viewpoint that given the recurrent deficit of approximately EC$70 million recorded in 2009, and mindful of the Anguillian context, as a small open and highly vulnerable economy with little or no social safety nets, it would be more efficacious to restore fiscal balance, defined as "restoring balance on the recurrent account", over the three year period 2010 -2012...... On page 5 of the letter he writes “Minister Bellingham, I have been adamant and on record as stating that you cannot tax a dead economy and that is why my Delegation pushed for approval to balance Anguilla's recurrent deficit over the three year period 2010 -2012.”

Fellow Anguillians these two statements clearly show that it was Mr Hughes and his AUM/APP government that asked for three years to balance the budget. The British agreed with his request back in March 2010…. According to Mr Hughes in the same letter on page 4, he states to Minister Bellingham: “On the basis of the green light from the FCO to restore balance on the recurrent account over three years, the Ministry of Finance technical staff prepared the 2010 Budget Estimates (which had to be approved by April 30 at the latest to comply with provisions of the Finance and Audit Administration (FAA) Act as regard Provisional Budgets) and within a three-year fiscal framework covering the period 2010 -2012.”

These three statements make it clear as to how the three year period came about. Fellow Anguillians, I ask you not to allow yourself to be Duped. We all need to demand the truth from Mr Hughes…..who continues to play the blame game for everything that takes place in Anguilla and does so by openly lying to us.

My Fellow Anguillians, the second thing Mr Hughes is lying about is that the stabilisation levy is not his tax but rather a British tax forced on him to implement. You will recall that on March 16 2011, Mr. Hughes admitted in the HOA that the budget is his budget. Well, it is the same budget which contains the stabilization Levy. On page 15 of his budget address it states that an Interim stabilization Levy will be introduced in 2011. His budget, his Taxes! !!!! do not --allow Mr Hughes and the AUM/APP Government to mislead you.

Further proof of the fact that the Stabilization Levy is the choice of the AUM/APP Government is found on page 8 of Mr Hughes letter of January 19th 2011 to Minister Bellingham... He said to Minister Bellingham that his government was taking measures to balance the budget in three years as was agreed, Mr Hughes wrote and I quote:

“GoA identified new revenue measures for implementation in 2011 as approved by Executive Council in June 2010 Fiscal Discussions with FCO OTD technical officials and/or subsequently amended by Executive Council. These included, among others:

• Increase in Property Tax rate by 150%
• Increase in Customs Surcharge from 1% to 3%
• Introduction of new 7% Petroleum Tax
• Introduction of Interim Stabilization levy on Income of 6%

(split equally between employees and employers with caps)”

Fellow Anguillians, I am giving you verifiable and documented facts of the actions of Mr. Hughes. Yet, he will say things contrary- to what he has done, to deliberately mislead you into believing it was not him --- but the British. The fact that the Stabilization Levy is solely a product of this AUM/APP government is found in the Government of Anguilla, Medium Term Economic Strategy (August 19 2010). On page 33 of this document under the heading Revenue Measures it is stated and I quote “as part of the medium term fiscal reform programme, the following revenue measures have also been approved:

• 7% communications levy – effective September 2010;
• Temporary 5% stabilization Levy on all salaries – effective January 2011
• Increase in customs surcharge from 1-3% effective January 2011.

“We know that in fact the customs surcharge is 6%.

As such the evidence shows that as early June 2010 the GOA had intended to impose the stabilization Levy. Fellow Anguillians this calls into question the transparency and openness of the AUM government. This government continues to speak about openness and transparency and yet taxes like the Stabilisation levy which will adversely affect our lives do not receive adequate public consultation… Today we are hearing about a Ghandi/Wiggins Report, a report which supposedly addresses further tax measures to be placed on us. But yet the report has still not been made public.

The third lie that Mr Hughes continues to speak about is that he cannot repeal the ACT, only the Secretary of State can do so. This is strange and perhaps his greatest contradiction yet. In his 2011 budget address in December 2010, on page 14 Mr.Hughes stated and I quote “Madam Speaker, it must be reiterated that the new tax measures being implemented for 2011, though necessary to lessen the financial gap, is also a step towards ensuring that our revenues are derived from more sustainable sources and towards a future of fiscal stability. He continued “ indeed the intention is to review the revenue base as early as possible in 2011, so there will be more certainty in terms of revenue collection and THE REPEAL OF NUISANCE REVENUE MEASURES” .

Yes!!! you heard me correctly,,,,, it was just this past December that the CM Hubert Hughes was advancing his Government’s plan to repeal nuisance revenue measures,,,, and yet in response to the Opposition’s motion to repeal the biggest nuisance revenue measure, namely, the Stabilization Levy, Mr Hughes continues to say he cannot do it --- only the Secretary of State can. Again I am begging all Anguillians to reject Mr Hughes’ lies.

Fellow Anguillians, the Chief Minister is totally wrong in his interpretation of the Anguilla Constitution as it refers to the repeal of bad law… Sections 47, 55 (1) and 59(1) of the Constitution read together provide that it is the HOA that approves laws and the HOA that repeals law. The dis-allowance of laws happens after the legislative process. The Secretary of State’s involvement comes at the end not at the beginning…. That is the elected Government’s role through Executive Council and the House of Assembly…. That is why the Chief Minister and his Colleagues were elected and that is why he is called “The Leader of Government Business in the Anguilla House of Assembly”. The Chief Minister seems to be seeking leadership from the Secretary of State rather than taking the initiative himself to relieve the burden of a “bad tax” on the people he was elected to serve even if he has to do so with the support of an Opposition motion.

Fellow Anguillians, I have demonstrated to you that Mr. Hughes is trying to mislead the society with his lies. He can, but refuses to seek to repeal the Stabilization Levy. You must now question why is he doing this? Ask yourself if this is consistent with a man who claims to be the champion for the causes of the lesser fortunate in Anguilla….. Is this the same man who has introduced a BAD TAX that brings the biggest burden on the lower to middle income earners….. while the higher income earners get the biggest break including all the members of the AUM/APP Government? According to Mr. Franklin Connor and I quote “this is a classic case of the poor paying for the rich in society”.

Despite all this we have not stopped in our efforts to get this Bad Tax repealed. On May 10th 2011, after being disappointed by our Government’s refusal to begin the repeal process of the Bad Tax, my colleague and I wrote to Minister Bellingham on the matter. In our letter, we wrote in part:

“In the context of the Levy being proposed in Anguilla we appeal to your Government’s commitment to fairness particularly in its taxation system as outlined in your budget report and point out the following issues of concern with that tax measure:

• The Levy is applied only on income earned under $12,000 Eastern Caribbean Dollars or approximately 2,200 pounds sterling.
• The law will also increase the hardship on businesses at a time when many are struggling merely to keep their doors open. Small businesses in particular will be badly affected.
• The Levy is also grossly unfair to the self-employed who are being taxed at 6% of their income, double the rate at which employed persons are being taxed and twice the rate at which businesses are taxed to match the tax paid by their employees.
• The principles on which the law is based are inappropriate to the purposes that the tax is intended to achieve and will cause harmful effects in the economy and the Anguillian community generally that will be felt for years to come.
• The Interim Stabilization Levy Act is a bad law that will be enforced by draconian measures in the form of high penalties and lengthy imprisonment terms.
• Employers are being required to pay 50% of the Levy on behalf of their employees.
• No proper provisions have been made to assess the self-employed.
• Persons having more than one employer cannot be fairly administered for purposes of taxation.
• The burden of proof as to an assessment is placed on the self-employed.
• There was not sufficient public consultation in the management and control of the tax measure that can result in the criminalization of taxpayers based on the extremely high and inflexible penalties.
• There are categories of taxpayers who will not be adequately monitored.

We asked Minister Bellingham for his views and comments on these matters. On June 8th 2011, I received a response from the Minister to our letter. The Minister’s response reads in part, and I quote:

Dear Minister Rogers

Thank you for your letter of 10th May about the Interim Stabilisation Levy Act.

As you note in your letter, economic and fiscal issues are the responsibility of the elected Government of Anguilla. It is therefore for the elected Government of Anguilla to decide the most appropriate mix of revenue and expenditure measures to meet the Chief Ministers commitment to balancing the overall budget by 2013.

The British Government, as you know was concerned that the draft 2011 budget originally put forward by the GOA in December last year was not going to maintain Anguilla on a path to meet that commitment. But we have never sought to determine what particular revenues measures the GOA should introduce, or whether some other mix of revenue and expenditure measures was more appropriate. YOU SHOULD THEREFORE TAKE UP THIS ISSUE WITH THE GOA.”

My Fellow Anguillians, you heard me correctly, the UK Minister confirmed what we have being telling you all along and he clearly confirms what I said earlier, that our Chief Minister is seeking to mislead us. It is obvious that the imposition of the stabilisation levy and the three year time frame to balance the budget were imposed on us by this AUM/APP Government --- and are under the control of the Government of Anguilla lead by the Hon. Hubert Hughes... Clearly, the Repeal of the Bad tax is in fact a matter for the AUM/APP Government, Not the Governor! Not the Secretary of State! Not the British Government.

The AUM/APP Government has no intentions of initiating the repeal this Bad Tax Act. It is therefore incumbent upon all of us to continue to agitate for its repeal. I am therefore calling on all Anguillians to take a stand against this Bad Tax. Insist to your representative that he must support the Repeal of the Interim Stabilization Levy Act. Let him know the hardship you are facing because of the same Tax, that will never realise revenue projected.

Based on our call to action, a number of citizens have asked us to launch an additional measure to seek to get this Act repealed. As a consequence, we will be circulating a petition calling for its repeal. To this end, I am asking that you stand up and be counted among those who oppose this BAD, UNFAIR AND INEQUITABLE TAX. You can do so by signing the petition. This petition will be handed to the Chief Minister. The aim is to give him and his AUM/APP government and the British Government, an indication of the extent of the opposition to this TAX.

If there is ever a time that Anguilla needs you it is now…. To sign the petition is not an indication that you are supporting the AUF and opposing the AUM/APP government, it is simply a show of your objection the Stabilisation levy. Stand and be counted. This is non-partisan…... AUM, AUF, APP and Independent Candidates supporters are all affected. It is a national initiative to have this BAD, UNFAIR AND INEQUITABLE TAX REPEALED . God bless you all and God Bless Anguilla!

Anguilla Parliamentary Opposition Leader: Hon. Evans Mcniel Rogers