I occasionally tune
in to Klass FM for entertainment when I am driving my car from North Hill into
town. I don’t get to hear much during
the short drive. But it seems these days
I mostly hear some agitator or the other spouting propaganda and drumming up
anti-government sentiment, usually over the impending arrival of GST.
These
radio commentators assure us that Hurricane GST will hit Anguilla on 1 July because
Premier Dr Lorenzo Webster betrayed Anguillians and agreed to implement GST when
during the election campaign he promised if elected to do away with the AUF’s
proposed GST (the Anguilla United Front was Anguilla’s previous administration).
It was not high sea-surface
temperature that caused Hurricane GST to develop. It was the AUF administration’s signature
back in 2018 to the agreement to impose GST that set off the disaster. The present Anguilla Progressive Movement
administration, appointed on 30 June 2020, is taking the blame for it. Do they deserve the abuse they are getting on
social media and the talk show programmes?
I had a word with Mr Ivan
Connor, the government’s press officer. He
explained to me that it was pure propaganda.
According to the draft AUF
White Paper of May 2020, GST was going to be the best thing that ever happened
to Anguilla. It would help to restore
growth and achieve fiscal sustainability and poverty alleviation. It would enable our economy to respond to and
recover from the global and economic recession, the pandemic, and natural disasters. The AUF administration committed Anguilla to
the full implementation of GST effective 1 January 2023. (The White Paper was later revised by the APM
administration and the FCDO and published in March 2021.)
The propaganda was that GST
would not be an additional tax. It would
replace the tourist-paid Accommodation Tax, the miniscule Environmental Levy,
and the almost non-existent Communication Levy.
The claim was that this would allow GST to be introduced at a relatively
low rate.
The more outrageous claim
was that GST would facilitate investment, provide incentives to exporters, and
make Anguilla internationally competitive.
What spin-doctor dreamed this stuff up?
Mind you, a lot of this puffery is repeated in the subsequent APM
revised White Paper. Meanwhile, we know
that the sole purpose of GST is to allow the Anguilla administration to get
money to continue pampering the Anguillian unemployed and unemployable.
The AUF administration’s concession
to the British Government in introducing GST arose from the devastation caused
by Hurricane Irma in September 2017. The
AUF administration was in a dilemma. It
was faced with a choice. Either enforce
existing tax legislation (for example, the Chief Auditor’s Report consistently
over the years shows that only 40% of Anguillians pay their property tax), or
introduce a new tax, preferably GST. The
AUF administration chose the second option.
In agreeing to the Medium Term Economic and Fiscal Plan (MTEFP) in June
2018, the AUF promised the FCDO they would introduce GST in Anguilla. They preferred to impose a new tax. If we collected the outstanding unpaid taxes,
we would probably have enough money to run the government for five years
without GST. We won’t enforce this one
either. Remember the rule: we cannot turn “innocent” Anguillians into
convicted criminals. To this day, we
still have not prosecuted, so far as I know, a single Property Tax evader.
Let us not forget how GST
came upon us. To recap, after Hurricane
Irma in September 2017, we fell back on British taxpayers’ generosity to meet the
over-indulgencies of our excessively expensive public service (I estimate we
currently employ two to do the job of one).
When the hurricane passed, the British made a gift to the AUF administration
of £60
million (EC$240 million at a four to one exchange rate) for rebuilding.
We had no reserves to pay
for our structural repairs ourselves. This
grant was earmarked for capital infrastructure.
In return, the AUF administration promised that we would cease to rely
on the British taxpayer. In future we
would raise our own revenue to pay our own costs. We promised we would enact the GST Act. As the months and years of the AUF
administration passed, we did not do so.
In the middle of the 2020
pandemic, and the close down of Anguilla’s economy, the AUF administration begged
for and got a further EC$100 million in grant in aid. This was intended specifically to pay civil
servants for the following ten months. It
was also, we realised, intended to throw money around to help win the coming
general elections. In exchange, the AUF administration
promised again on 11 June 2020 that it would either enact the GST or cut the
cost of the public service. We took the
money. We did not cut the cost of the public
service. The AUF’s tactic did not
work. It lost the elections. But not before it had negotiated yet another
EC$100 million gift from the British taxpayers to pay civil servants. This windfall was due to be paid within days
after the general elections.
The day after coming to
office on 30 June 2020, Dr Webster was faced with a dilemma. There were no funds in the Treasury. He must either default in paying civil
servants’ salaries for June or accept the AUF-negotiated EC$100 million from
the FCDO. He chose to pay the civil
servants. You may think, as I do, that
he missed the golden opportunity to send all of them home while he worked out
how to permanently let half of them go as being an unproductive and unnecessary
burden on Anguilla’s taxpayers.
Let us be clear. We got the second EC$100 million by repeating
the promise of the previous administration, that we would introduce GST. Since we would not reduce our expenses of government,
we would increase taxes to pay for it. That
was the promise. On 29 July 2021, our
House of Assembly passed the GST Act into force.
The new APM Administration was
immediately in political trouble. They promised
the people during the 2021 election campaign that they would not agree to
accept the British EC$100 million gift if it meant passing the GST Act. But, once in office, they faltered. They reconsidered. They took the seemingly easy option of taking
the money and agreeing in exchange to pass the GST Act into law.
The CDB had also agreed with
the previous administration to make a $30 million loan conditional on passage
of the GST Act. The new
administration needed this additional money to pay more salaries. It could not turn it down. On taking the
loan, it was now obligated also to the CDB to pass the GST Act into law
The FCDO did not force us to
pass the GST Act. We took their
money, and the money of the CDB, on a solemn undertaking to start paying for
our expensive government ourselves by imposing GST. If we do not live up to our promises made in
exchange for hard cash, then would we be anything but a bandit state?
We have no one to blame for
our dire circumstances but ourselves. The
British don’t owe us anything. We don’t
pay a penny in British taxes. Blaming
the “British” for our present problems is pure xenophobia if not an appeal to racism. Let us face it, we Anguillians always delight
in blaming others for our misfortunes.
We are never to blame. It has
always been so.
What really gets to me is
the pure hypocrisy of the government critics who blame Dr Webster’s
administration for agreeing to the GST Act after he came to office. Are they willing to step forward and say that
he should have chosen the alternative?
Would they have supported him sending the civil servants home without
pay in June 2020? Of course not. What he did instead was masterful. He negotiated down the most onerous terms and
conditions of the GST as agreed by the AUF administration. He got them to agree to making the GST terms
as light as he possibly could.
I hope to look at these in a
later article. I also hope to expose the
mistaken, if not malicious, motives of some of his most vociferous critics.
