Montserrat should Consider Value Added Tax Regime, Says Analyst

BRADES – Financial Analyst Peter Queeley is calling for the government to consider adopting a similar tax system as in other members of the Organisation for Eastern Caribbean States (OECS).

In a press statement reviewing the 2015 Budget Presentation, Queeley said if Montserrat is to reduce its reliance on foreign aid to fund recurrent expenditures, the current tax system would need to be replaced.

“I submit that the Government of Montserrat will be best advised to review its current indirect taxation regime with the view towards replacing the existing cumbersome tax regime with the easier to administer Value Added Tax (Vat) Regime, similar to that of other OECS neighbors,” the statement read.

The analyst said the VAT Tax regime would provide the Government with “more options in terms of zero rating and exempting goods and services considered to be necessities or applicable to the less fortunate.” It would also allow “Government the flexibility of taxing the productive exports sectors such as tourism and sand mining at rates that will not affect the competitiveness in terms the final price for products and services.”

Queeley, who heads the St. Patrick’s Cooperative Credit Union also noted that as tourism has the potential to be the primary economic driver for Montserrat, there needs to be clearly defined strategies of what infrastructure (port, breakwater, marina and hotel) will be put in place to allow the island to attract the target markets of high net worth visitors for the luxury villa sector and cruise tourists.

“The development of a tourism sector will have a positive effect on government revenues through taxation and fees and an even more positive impact on the economy via the development of linkages to other sectors such as restaurants and catering, transport, agriculture and Art Craft and Culture,” stated Queeley.

3 thoughts on “Montserrat should Consider Value Added Tax Regime, Says Analyst

  • April 7, 2015 at 8:14 pm
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    Sure…introduce a VAT. Look where that got our EC neighbours. Massive deficits, reduced tourism, lower gratuities for staff. Not to mention the cost of implementation. Just what we need right now.

  • April 8, 2015 at 8:31 am
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    What is cumbersome about collecting taxes on goods at the point of Importation? What is cumbersome about PAYE? What is cumbersome about an annual Property Tax?

    VAT on the other hand poses significant challenges to implement and to manage.

    Mr Queeley should examine the reason for a Value Added Tax and realize that it is not a system suited for an economy that produces very little goods.

    VAT is normally introduced to collect more money from low income people; then when it starts to backfire, the government zero rates a few goods, while hoping to continue getting as much money from poor people as possible.

  • April 8, 2015 at 10:14 am
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    Rubbish!

    If this was such a good idea, why did Queeley and his MCAP party not promote it during the recent election campaign?

    VAT has been a disaster for poor people in the OECS.

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