It was very amusing --- but perhaps sad to hear Members of the House of Assembly on the Government side boast that they will have a budgetary surplus at the end of the year to the tune of 20 million EC dollars. While this is conceivable on the recurrent budget, given the revenues from the sale of the Viceroy Resort, such a boast begs a plethora of questions as follows:
1) Why then are we making a fuss about contributing a measly US$10,000 for the National Cricket Team to participate in the important Annual Leeward Island Cricket Tournament if we expect such a big surplus?
2) Why then are we not making a case to the British Government that we have already achieved a balanced budget?
3) Should not taxpayers now begin to wonder whether the newly imposed and proposed tax measures are excessive?
4) Will carrying a 20 million dollar surplus into 2012 allow for a repeal of unfair and inequitable tax measures and provide an opportunity for a more comprehensive review of our tax regime?
5) Does the Government contemplate the sale of another major property in 2012 to ensure another surplus next year?
6) Should the Government not be considering a major capital project to stimulate economic activity as the FCO Minister suggested?
7) With that kind of surplus could we not create some well-needed jobs and business opportunities?
8) Wow! Isn’t the Government lucky that the past Government decided to allow for two major tourism developments?
9) Wow! Would it not have been an EC$40 million surplus --- if the Chief Minister did not allow the Parliamentary Secretary to negotiate an MOU with the Starwood Capital Group on his own; without the consent of Executive Council; and without the knowledge of other Ministers of Government?
10) What are they talking about? --- People are out of work; people cannot pay their basic bills; people are losing their homes and personal assets; businesses are closing down --- How will the surplus be employed to bring them good news?
These are just a few of the questions, which I fielded from concerned citizens who listened to “Haydn and Jerome”. The overarching question of course was: “Are these guys serious?” It is a natural tendency for most Governments --- after a long period in office to loose touch with the burning issues affecting the people. Very often it is not because they are insensitive but rather because they may become inundated with so many complaints and requests that they are unable to process all of them effectively. They then get caught up in dealing with situations almost dispassionately, having been overwhelmed by the sheer volume of the matters they must attend to --- and the impossibility of being able to please everybody, sometimes even at the same time.
The AUM Government in particular, during the election campaign accused the past Government of such an attitude. They pledged on the other hand to be a Government that would listen to the cries of the people. In fact, it is reported that the Elected Representative for Valley South, Hon. Evan Gumbs, cried real tears as he described the hungry people in Anguilla who were brought to this state of want by the wicked United Front Government. One of the leading clerics of the AUM, Rev. John A. Gumbs, supposedly through some divine connection, declared that: “Anyone who votes for the Anguilla United Front commits an act against God and will be punished!” The point I am making is that the present Government has been in office just over eighteen months and has already lost considerable touch with the people they have been elected to represent. In fact, within a few short months of their ascension to power their supporters were claiming that they do not answer their phones; they have changed their phone numbers; they only respond to BBM’s; they switch parties without their consent; they have become arrogant; and so on.
Indeed, the Hon. Jerome Roberts, who appears to have taken over the role of “mouth piece” of Government from the Parliamentary Secretary --- tried to explain in the House of Assembly why he and the elected Member for Valley South should have new vehicles approved for them even while the National Cricket Teams’ request for funding to participate in the traditional Leeward Islands Tournament (for less than one quarter of the value of the vehicles in question) should be rejected. A listener whose party affiliation I am unable to ascertain, made this remark in my presence: “How de hell Jerome fix he face to say dat?”
But before I proceed with the issue of the so-called surplus, let me make one point very clear! It appears the Government has been engaging the British in a debate as to whether the funds from the Viceroy sale constitute “windfall revenues”. Typically, the term “windfall” means: “a piece of unexpected good fortune”(Source: Oxford Dictionary). In this sense, the revenues from the sale of Viceroy were not unexpected. In fact, they were anticipated in the projections of both this Government and the past Government. However, I believe that the point is a moot one. Whether the revenue is “windfall” or otherwise its application to the budgetary situation must be the same! The reality is, these revenue levels may not be forthcoming in next year’s budget. The Anguilla Government must therefore decide on how to best to use this revenue, given our present circumstances. To boast of having a year-end surplus based on unsustainable sources is at best puerile. It is extremely unlikely that the GOA will benefit from such revenues on a constant basis. Government should therefore be using this space and opportunity to expand the economy and rationalize the tax structure so as to create more reliable revenue streams for sustainable growth and development.
In this context, one of the questions I raised earlier, in the face of this boast by the Parliamentary Secretary and the Elected Member for East End was: “Will carrying a 20 million dollar surplus into 2012 allow for a repeal of unfair and inequitable tax measures and provide an opportunity for a more comprehensive review of our tax regime?” This question is particularly important given the recent complaints regarding the draconian and inequitable penalties imposed on taxpayers for unintentional breaches of the Interim Stabilization Levy Act (“the Levy”). The “Letter to the Editor” section of the Anguillian Newspaper contains a submission on “the Levy” from an exceptionally honest taxpayer and law-abiding citizen explaining how he/she was penalized for trying to be compliant with “the Levy” after he/she realized that he/she was misinformed about the procedures for filing. In other words technically punished for trying to do the right thing.
In my March 18th article entitled “You born on All Fool’s Day!” in speaking about the planned implementation of “the Levy” I wrote: “The IRS style penalties contained in the Bill are also a cause for concern and particularly so in a “no direct taxation” culture. Compliance laws are important for ensuring fairness in any tax system but they should not lend themselves to creating criminality without due regard for the nature of the environment in which the system is to operate. In this context the self-employed will require special attention.”
The Anguilla United Front used several platforms to explain the unfairness of the “Levy”. AUF elected representatives tried to move motions in the House of Assembly for its repeal; petitions were circulated calling for substantive amendments or repeal of the Act; the Leader of the Opposition wrote a letter to the FCO Minister advising him among other things that: “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;” and there were at least two public meetings where this matter was the main topic.
There was no shortage of initiatives from our party to point out the dangers of the “Levy” and demand its repeal. While the community expressed outrage --- precious few stepped up to the plate to be counted. In this regard one of the AUM supporters was probably right when he said to me: “Banks why awh you harassing yourselves! People gon complain --- but it gon only be a two week talk! Most of dem don’t believe the tax is for dem anyway!” We believe, however, as the situation in Anguilla worsens economically, people are beginning to take us more seriously even though we may have lost valuable time.
In a letter to the Chief Minister dated May, 4th 2011, the Leader of the Opposition, Hon. Evans McNiel Rogers, requested that he should “take all necessary steps to repeal the Levy as a matter of urgency” giving a lengthy list of reasons for doing so. The Chief Minister’s response was only two sentences as follows: “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.” On other media the Chief Minister maintained the position that “the stabilization levy is not his tax but rather a british tax forced on him to implement. And that it is only the Secretary of State that can repeal an ACT”. All of which goes to show that the Chief Minister does not take responsibility for anything not even to exercise powers that are a part of his function as a legislator.
The concerned business owner with an income of less than EC$2,000 per month received a rude awakening because he/she did not know that being exempt from the tax he/she was still required to file a timely return. The penalty came up to EC$8,700 for not filing returns since April --- a period of just five months but almost as much as his/her declared income for the same period. The business owner made two excellent points:- a) To the best of his/her knowledge there has been no documentation on penalties sent to business licence owners outlining their full obligations under this law. b) There is a need to consider penalties more in line with the size of the business entity.
We have been saying all along that given the “culture change” required for the successful implementation of the “Levy” --- there was need for more consultation not only with employers but with government agencies as well. This is especially true with regards to what we have constantly referred to as the “IRS style” penalties involved. In fact during the first month that the Levy was due --- few answers were forthcoming from the agencies responsible for collections. And during the consultative process it was heartrending to see just one Senior Officer in the entire service burdened with the task of responding to questions from angry employers and self-employed persons pointing out the unfairness of the tax.
The Chief Minister and his colleagues may try to convince you that the British Government is responsible for the tax but he cannot blame the British Government for the penalties. The Government has every opportunity to decide on the level of penalties required to encourage compliance. It is patently unfair for the nice lady down the street selling sugar cakes and mauby to pay the same EC$50 penalty as Cable & Wireless, if she is a day late on filing her return. The Government could easily have adopted the penalty system of Social Security, which is a 5% late fee penalty. Furthermore there should have been a grace period on penalties during the implementation phase of the Levy since it was clear that the process was rushed and the information was not properly disseminated. All this was in the Government’s hand --- instead they simply stood aside and blamed the British.
What is ironic about the whole thing is that if the same draconian penalties were enforced in the Property Tax Act the Chief Minister and one of his Ministers would have received the maximum penalty, that is, imprisonment --- and probably would not have been able to run for public office. Yet they sit “holier than thou” in the Executive Council Chambers approving tax laws with such inequitable penalties being imposed on their own people. And even worse refusing to respond to the call of the Opposition to consider making major amendments or repealing this bad tax, by claiming that they do not have the power to repeal an Act --- when in fact that power is clearly enshrined in Section 47 & 55(1) of the Anguilla Constitution. This was an opportunity for Government and Opposition to work together to improve or repeal this bad tax.
I would like to believe that the purpose of the Levy is not to collect huge penalties but to encourage compliance in an atmosphere of understanding. And furthermore that any penalties imposed would be based on a fair system of Offences and Punishments approved by the Government. But with new tax measures being discussed even as we boast about a surplus; and the Government continually using the “british scapegoat” to abdicate its responsibilities to the people --- I believe that it is time for all of us to demand that “Zacchaeus comes down from the sycamore tree” of arrogance and deals fairly and equitably with the taxpayers of this country! Biblically speaking of course! Zacchaeus Come Down!
1) Why then are we making a fuss about contributing a measly US$10,000 for the National Cricket Team to participate in the important Annual Leeward Island Cricket Tournament if we expect such a big surplus?
2) Why then are we not making a case to the British Government that we have already achieved a balanced budget?
3) Should not taxpayers now begin to wonder whether the newly imposed and proposed tax measures are excessive?
4) Will carrying a 20 million dollar surplus into 2012 allow for a repeal of unfair and inequitable tax measures and provide an opportunity for a more comprehensive review of our tax regime?
5) Does the Government contemplate the sale of another major property in 2012 to ensure another surplus next year?
6) Should the Government not be considering a major capital project to stimulate economic activity as the FCO Minister suggested?
7) With that kind of surplus could we not create some well-needed jobs and business opportunities?
8) Wow! Isn’t the Government lucky that the past Government decided to allow for two major tourism developments?
9) Wow! Would it not have been an EC$40 million surplus --- if the Chief Minister did not allow the Parliamentary Secretary to negotiate an MOU with the Starwood Capital Group on his own; without the consent of Executive Council; and without the knowledge of other Ministers of Government?
10) What are they talking about? --- People are out of work; people cannot pay their basic bills; people are losing their homes and personal assets; businesses are closing down --- How will the surplus be employed to bring them good news?
These are just a few of the questions, which I fielded from concerned citizens who listened to “Haydn and Jerome”. The overarching question of course was: “Are these guys serious?” It is a natural tendency for most Governments --- after a long period in office to loose touch with the burning issues affecting the people. Very often it is not because they are insensitive but rather because they may become inundated with so many complaints and requests that they are unable to process all of them effectively. They then get caught up in dealing with situations almost dispassionately, having been overwhelmed by the sheer volume of the matters they must attend to --- and the impossibility of being able to please everybody, sometimes even at the same time.
The AUM Government in particular, during the election campaign accused the past Government of such an attitude. They pledged on the other hand to be a Government that would listen to the cries of the people. In fact, it is reported that the Elected Representative for Valley South, Hon. Evan Gumbs, cried real tears as he described the hungry people in Anguilla who were brought to this state of want by the wicked United Front Government. One of the leading clerics of the AUM, Rev. John A. Gumbs, supposedly through some divine connection, declared that: “Anyone who votes for the Anguilla United Front commits an act against God and will be punished!” The point I am making is that the present Government has been in office just over eighteen months and has already lost considerable touch with the people they have been elected to represent. In fact, within a few short months of their ascension to power their supporters were claiming that they do not answer their phones; they have changed their phone numbers; they only respond to BBM’s; they switch parties without their consent; they have become arrogant; and so on.
Indeed, the Hon. Jerome Roberts, who appears to have taken over the role of “mouth piece” of Government from the Parliamentary Secretary --- tried to explain in the House of Assembly why he and the elected Member for Valley South should have new vehicles approved for them even while the National Cricket Teams’ request for funding to participate in the traditional Leeward Islands Tournament (for less than one quarter of the value of the vehicles in question) should be rejected. A listener whose party affiliation I am unable to ascertain, made this remark in my presence: “How de hell Jerome fix he face to say dat?”
But before I proceed with the issue of the so-called surplus, let me make one point very clear! It appears the Government has been engaging the British in a debate as to whether the funds from the Viceroy sale constitute “windfall revenues”. Typically, the term “windfall” means: “a piece of unexpected good fortune”(Source: Oxford Dictionary). In this sense, the revenues from the sale of Viceroy were not unexpected. In fact, they were anticipated in the projections of both this Government and the past Government. However, I believe that the point is a moot one. Whether the revenue is “windfall” or otherwise its application to the budgetary situation must be the same! The reality is, these revenue levels may not be forthcoming in next year’s budget. The Anguilla Government must therefore decide on how to best to use this revenue, given our present circumstances. To boast of having a year-end surplus based on unsustainable sources is at best puerile. It is extremely unlikely that the GOA will benefit from such revenues on a constant basis. Government should therefore be using this space and opportunity to expand the economy and rationalize the tax structure so as to create more reliable revenue streams for sustainable growth and development.
In this context, one of the questions I raised earlier, in the face of this boast by the Parliamentary Secretary and the Elected Member for East End was: “Will carrying a 20 million dollar surplus into 2012 allow for a repeal of unfair and inequitable tax measures and provide an opportunity for a more comprehensive review of our tax regime?” This question is particularly important given the recent complaints regarding the draconian and inequitable penalties imposed on taxpayers for unintentional breaches of the Interim Stabilization Levy Act (“the Levy”). The “Letter to the Editor” section of the Anguillian Newspaper contains a submission on “the Levy” from an exceptionally honest taxpayer and law-abiding citizen explaining how he/she was penalized for trying to be compliant with “the Levy” after he/she realized that he/she was misinformed about the procedures for filing. In other words technically punished for trying to do the right thing.
In my March 18th article entitled “You born on All Fool’s Day!” in speaking about the planned implementation of “the Levy” I wrote: “The IRS style penalties contained in the Bill are also a cause for concern and particularly so in a “no direct taxation” culture. Compliance laws are important for ensuring fairness in any tax system but they should not lend themselves to creating criminality without due regard for the nature of the environment in which the system is to operate. In this context the self-employed will require special attention.”
The Anguilla United Front used several platforms to explain the unfairness of the “Levy”. AUF elected representatives tried to move motions in the House of Assembly for its repeal; petitions were circulated calling for substantive amendments or repeal of the Act; the Leader of the Opposition wrote a letter to the FCO Minister advising him among other things that: “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;” and there were at least two public meetings where this matter was the main topic.
There was no shortage of initiatives from our party to point out the dangers of the “Levy” and demand its repeal. While the community expressed outrage --- precious few stepped up to the plate to be counted. In this regard one of the AUM supporters was probably right when he said to me: “Banks why awh you harassing yourselves! People gon complain --- but it gon only be a two week talk! Most of dem don’t believe the tax is for dem anyway!” We believe, however, as the situation in Anguilla worsens economically, people are beginning to take us more seriously even though we may have lost valuable time.
In a letter to the Chief Minister dated May, 4th 2011, the Leader of the Opposition, Hon. Evans McNiel Rogers, requested that he should “take all necessary steps to repeal the Levy as a matter of urgency” giving a lengthy list of reasons for doing so. The Chief Minister’s response was only two sentences as follows: “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.” On other media the Chief Minister maintained the position that “the stabilization levy is not his tax but rather a british tax forced on him to implement. And that it is only the Secretary of State that can repeal an ACT”. All of which goes to show that the Chief Minister does not take responsibility for anything not even to exercise powers that are a part of his function as a legislator.
The concerned business owner with an income of less than EC$2,000 per month received a rude awakening because he/she did not know that being exempt from the tax he/she was still required to file a timely return. The penalty came up to EC$8,700 for not filing returns since April --- a period of just five months but almost as much as his/her declared income for the same period. The business owner made two excellent points:- a) To the best of his/her knowledge there has been no documentation on penalties sent to business licence owners outlining their full obligations under this law. b) There is a need to consider penalties more in line with the size of the business entity.
We have been saying all along that given the “culture change” required for the successful implementation of the “Levy” --- there was need for more consultation not only with employers but with government agencies as well. This is especially true with regards to what we have constantly referred to as the “IRS style” penalties involved. In fact during the first month that the Levy was due --- few answers were forthcoming from the agencies responsible for collections. And during the consultative process it was heartrending to see just one Senior Officer in the entire service burdened with the task of responding to questions from angry employers and self-employed persons pointing out the unfairness of the tax.
The Chief Minister and his colleagues may try to convince you that the British Government is responsible for the tax but he cannot blame the British Government for the penalties. The Government has every opportunity to decide on the level of penalties required to encourage compliance. It is patently unfair for the nice lady down the street selling sugar cakes and mauby to pay the same EC$50 penalty as Cable & Wireless, if she is a day late on filing her return. The Government could easily have adopted the penalty system of Social Security, which is a 5% late fee penalty. Furthermore there should have been a grace period on penalties during the implementation phase of the Levy since it was clear that the process was rushed and the information was not properly disseminated. All this was in the Government’s hand --- instead they simply stood aside and blamed the British.
What is ironic about the whole thing is that if the same draconian penalties were enforced in the Property Tax Act the Chief Minister and one of his Ministers would have received the maximum penalty, that is, imprisonment --- and probably would not have been able to run for public office. Yet they sit “holier than thou” in the Executive Council Chambers approving tax laws with such inequitable penalties being imposed on their own people. And even worse refusing to respond to the call of the Opposition to consider making major amendments or repealing this bad tax, by claiming that they do not have the power to repeal an Act --- when in fact that power is clearly enshrined in Section 47 & 55(1) of the Anguilla Constitution. This was an opportunity for Government and Opposition to work together to improve or repeal this bad tax.
I would like to believe that the purpose of the Levy is not to collect huge penalties but to encourage compliance in an atmosphere of understanding. And furthermore that any penalties imposed would be based on a fair system of Offences and Punishments approved by the Government. But with new tax measures being discussed even as we boast about a surplus; and the Government continually using the “british scapegoat” to abdicate its responsibilities to the people --- I believe that it is time for all of us to demand that “Zacchaeus comes down from the sycamore tree” of arrogance and deals fairly and equitably with the taxpayers of this country! Biblically speaking of course! Zacchaeus Come Down!
By: Victor F. Banks
Victor Banks is a former Finance, Economics, Commerce and Tourism Minister on Anguilla. He is presently the leader of the Oposition Anguilla United Front Party, writer and author of a weekly political article for the Anguillian News Paper, lyricist, and a self-employed entrepreneur.
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