LONDON, England -- The newly elected Turks and Caicos Islands (TCI) government can scrap the controversial introduction of value added tax (VAT), according to a parliamentary answer given by a UK minister in the House of Commons on Thursday.
Business leaders in the TCI have given a cautious welcome to a statement made by UK government minister Mark Simmonds.
Simmonds, recently appointed Parliamentary Under Secretary of State at the Foreign and Commonwealth Office, was replying to a series of questions by veteran Labour MP Brian Donohoe, who is a member of the APPG for the Cayman Islands and takes a great interest in the governance of all Overseas Territories.
Donohoe tabled a question asking if Simmonds would reconsider the implementation of VAT in the Turks and Caicos Islands.
Simmonds replied, “The introduction of value added tax is a decision for the Turks and Caicos Islands government. The VAT Bill was signed into law on 18 July and will come into force on 1 April 2013.”
The minister’s answer comes less than a week after Rufus Ewing and the Progressive National Party were elected following three years of interim government under Governor Ric Todd.
A Turks and Caicos Independent Business Council (TCIBC) spokesman said, “At first glance we welcome the minister’s statement as the PNP support the abolition of VAT. However we are fairly certain that the governor can and will override this, which doesn’t say a lot for democratic government in these islands.
“It also leaves Mr Simmonds in a delicate position and we trust he understands the importance of his answer to Mr Donohoe and the importance of giving such an answer to the House of Commons.”
Donohoe asked two other questions regarding the governance of TCI and Simmons gave comprehensive answers declaring the British government's support for the long term.
The TCIBC spokesman continued: “On the surface Mr Simmonds appears to be supportive of the Turks and Caicos Islands but the question remains whether the Governor and FCO reflect his views. The real test will come when and if the new government attempts to abolish VAT and the Governor overrules them.”