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.