Friday, June 08, 2012
Page g 1 Today’s Scripture
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The God who said, “Let light shine out of darkness,” . . . has shone in our hearts to give the light of the knowledge of the glory of God in the face of Jesus Christ. - 2 Corinthians 4:6 (NRSV)
Government increases tax burdens Vol. XXVII No. 12
Week Ending Friday, June 08, 2012
Price $2.00
Removes service tax adds it to consumption tax and burdens the poor Premier Reuben T. Meade
More Headlines... Man from Baker HIll...pg 2
Montserrat celebrates Diamond Jubilee...pg 3 The Ring of Silence...pg 4 Tourism Development Plan...pg 6 Kids’ Korner...pg 10 Early Childhood Month...pg 14 Accuweather & Weekly Horoscopes...pg 15
To w a r d s the end of last week, Montserrat buzzed with disgust and annoyance at the news that a new tariff, according to a Government press release, dated May 21 2012. The release declared: “Measures to simplify and rationalise Import Tax rates will be introduced from 1st June 2012 The government move effectively introduced new taxes on average between 10 and 12.5% and the cost of living skyrocketed. One analyst said: “The new tariff structure has, in some instances, increased the combined duty and consumption tax by as much as 40%, but more generally by between 0.4% to 15%. But that’s not all; by the time the importer’s/trader’s markup is added on to an increase of 10%, the price of the goods/item to the
consumer could be raised by as much as 12.5%.” He explained, “If one such imported item cost $1.00 and the new tariff caused the combined duty and consumption tax to increase from 10% to 20%; so that the price of the item is increased from $1.10 to $1.20. Then the increase in cost to the importer is 10 cents. Moreover, if the importer’s markup is a modest 25%, the additional cost to the consumer will be 12.5 cents; that is 10 cents plus 25% of 10 cents.” In his Budget address last year, March 24, Premier, still Chief Minister had announced, “…with effect from 1 July 2011, the 5% Service Tax and the Consumption Tax with its multiple rates will be replaced by a General Consumption tax of 15% on all goods. This will be structured so that it can be applied to internal and external services.” He had done so under the heading: Modernization and Simplification of the Tax Regime, where he said, “Government is committed to making it simpler and easier to do business in Montserrat.
Now that we have successfully implemented ASYCUDA World, we will turn our attention to the simplification of the tax rates. We intend to de-mystify the clearance of goods at our Ports of Entry and to ensure that the systems and rates are easier for all to understand; …and to reduce the number of rates used in clearing goods through the Customs.” Customs and revenue officials explained, as Peter Henderson who then reported to TMR that the idea being worked on at the time was, “to simplify the revenue collection increasing it at the same time while decreasing the tax burden on the community…” ASYCUDA World had been introduced and in few months revenue officials claimed that although imports had been down the revenue had increased significantly, as a result. Since the tariff was now introduced, many including several legislators have expressed surprise, sometimes dismay at the extent to which the tariff
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