Javascript Menu by Deluxe-Menu.com

SKNBuzz Radio - Strictly Local Music Toon Center
My Account | Contact Us  

Our Partner For Official online store of the Phoenix Suns Jerseys

 Home  >  Headlines  >  NEWS
Posted: Sunday 26 October, 2014 at 10:29 PM

Nevis no longer contributes to pooled tax collection

Hon. Marcella Liburd and Hon. Mark Brantley
By: Staff Reporter, SKNVibes.com

    Brantley says Nevis now earns more revenue

     

    BASSETERRE, St. Kitts – SPEAKING early last week on Freedom FM’s talk show programme – ‘Good Morning St. Kitts-Nevis’ – the Hon. Marcella Liburd addressed the issue of pooled revenue collection between the two islands and noted that Nevis no longer contributes to the constitutional arrangement.

    The Federal Minister of Health said that Nevis, a very long time ago, had stopped pooling its revenue collected from all taxes with those of St. Kitts, and that in recent times the Concerned Citizens Movement-led Nevis Island Administration (NIA) has done the same with revenue collected for Value Added Tax (VAT).

    Quoting Section 110 of the Constitution, Minister Liburd said: “Subject to subsection (2), the proceeds of all taxes collected in Saint Christopher and Nevis under any law shall be shared between the Government and the Administration and the share of each shall be determined by reference to the proportion between the population of the island of Saint Christopher and the population of Saint Christopher and Nevis as a whole or, as the case may be, the population of the island of Nevis and the population of Saint Christopher and Nevis as a whole, as ascertained by reference to the latest available results of a census of those populations carried out in pursuance of a law enacted by Parliament.”

    She also stated how the proceeds collected would be shared between the Federal Government and the NIA, according to the Constitution.  

    “Basically,” she said, “what that is saying is that you suppose to, in simple layman terms, pool the taxes and then, based on the population proportion...a portion between St. Kitts and Nevis. So, first of all there must be pooled resources for that to happen. 

    “It also says, however, that the share of the Nevis Island Administration, you must first deduct from that their contribution to the common services.”

    The Minister, in furtherance of her explanation, stated that both St. Kitts and Nevis now collect taxes individually.

    “Let us look at what is actually happening. First of all there are no pooled resources...that used to happen a long time ago, but also a very long time ago that was stopped. So the taxes don’t come together anymore. So when people are talking, what premise are they going on? There are no pooled resources anymore, apart from, well I am going to come to the VAT because the VAT is something recent. But in terms of taxes, there are no pooled resources. For quite some time now that has been stopped. So Nevis collects its own and St. Kitts collects its own. There are no pooled resources, so how are you going to apportion what is not pooled? 

    She noted that what Nevis did was a breach of the Constitution and insinuated that it was a plan hatched by the NIA because Nevis’ economy, at that time, was performing better than that of St. Kitts.

    “People are talking about the Constitution, isn’t that a breach of the Constitution? Because the Constitution speaks about pooled resources! So why are they referring to the Constitution with respect to financial arrangements when they know there is no pooled resources? That is part of how they try to mislead people. And from my understanding, it used to happen but after a while Nevis economy was doing better than St. Kitts economy and so they didn’t want that to happen at that point and time anymore. And so it stopped, and it has not restarted.”

    Speaking to the VAT issue, Liburd explained that it was introduced as part of the Federation’s tax reform and the same agreement was established as that of the former taxes.

    “There was a 76/24 arrangement with respect to the VAT...that is out of the pool 76 would go to St. Kitts and 24 to Nevis based on the population arrangement. And I want to say that all of this came about not just of NRP and Labour, but that was done at a time when we were reforming our tax system, total tax system, and that was a part of those reforms. So we had technical people here from CARTAC who were helping us with the reforms.

    “I want to say what that means is that for every VAT dollar 24 cents would go to Nevis and 76 cents to St. Kitts based solely on the population.”

    Liburd however stated that since the NIA had encountered financial difficulty earlier this year in paying civil servants, the Administration ceased to contribute to the pooled agreement. 

    ‘I don’t even think that they put in 25 cents for even five months since the VAT was implemented. Which means for the vast majority of the times, Nevis has been collecting more than they put in based on the arrangement. Also, in recent times, since all these issues that they seem to be having with National Bank, they have without notice to anybody, as far as I am concerned certainly without notice to the Federal Government, stopped depositing the VAT in National Bank. And so even that pooled thing with the VAT has been breached this year.”

    Minister Liburd emphatically stated that by not contributing, the NIA is losing over $1M every month.

    “That pooled arrangement has been breached by them, but to their detriment. Because with all the talk you are hearing, they are losing over $1M every month from that arrangement. It means that they were subsidised out of St. Kitts, with that arrangement, to the extent of over $1M every month.”

    One day after making those statements, Nevis’ Deputy Premier, the Hon. Mark Brantley responded but not to the revenue collected from all taxes; instead, he only spoke to the VAT issue. 

    He was at the time talking about various political issues affecting the CCM-led NIA on his radio programme – ‘On The Mark’ – at Von Radio in Nevis.

    He accused the NRP of colluding with the ruling St. Kitts-Nevis Labour Party in making a deal for the VAT collected in Nevis, and that his party stopped contributing after the National Bank had refused to honour the NIA cheques in April 2014.

    “When the CCM was in campaign the NRP had negotiated a deal with the Federal Government, their collation partner, and they said that on the Value Added Tax that Nevis would get 24 percent. Nevis would send all its tax to St. Kitts, they would put it into one pool and then Nevis gets back 24 percent. Up and down the country they told you that this was good for Nevis and Nevis was going to benefit, and Nevis was going to get lion share because every month they said Nevis gets more back than they put in. 

    “What has happened is that in April this year when the National Bank in its wisdom chose to bounce our cheques and deprive our good civil servants, hard working public workers in Nevis their salaries, that the Nevis Island Administration took a particular position, which has secured those salaries for the ensuing months since then. And that position involved, in part, hold on to what there were VAT.” 

    Reminding his audience what he said during the CCM’s campaign, Brantley spoke about a letter he claimed was already written, at that time, to the Federation’s Leader, Prime Minister the Rt. Hon. Dr. Denzil Douglas.


    “Remember we campaigned about this; the CCM campaigned and I said at the campaign in Cherry Garden that the letter was already written to say: ‘Dear Mr. Prime Minister we are not continuing with this VAT sharing arrangement.’”

    Brantley added that Nevis’ Premier the Hon. Vance Amory, who is also the Finance Minister of that island, evaluated the situation on what he termed “this bouncing around cheques, vicious act of terrorism, economic terrorism against the people of Nevis”. 

    He said that since his party took office and had contributed to the pooling of the revenue collected from the VAT, the NIA had paid more than what it got out.

    “I asked, well, how we have been doing since we have been holding on to what we earn. Well, I have the numbers now and I find it interesting. For the 12 months from 13th January 2013 to 13th December 2013, 12 months; out of those 12 months in seven of those months Nevis paid more VAT into the pool than it got out. And in five of those months Nevis got out more than it paid in. 

    “On 13th January Nevis paid in $3.3M, we got out S3.0M; on 13th February Nevis paid in $3.6M, we got out $2.8M; on 13th March Nevis paid in $3.1M, we got out $2.2M; on 17th April Nevis paid in $3.7M, we got out $3M; on 13th May Nevis paid in $3.2M, we got out $3M; and then on 13th June Nevis paid in $2.1M, we got out $2.4, so that was a month that we got more than we paid in; on 13th July Nevis paid in $3M, we got out $2.8M; on 13th August we paid in $2.8, we got out $2.9M, so that’s $100 000 more than we paid in; on 13th September Nevis paid in $3.1M, we got out $2.6M; on 13th October we paid in $2.9M, we got out $3.4M...that was the only time that we saw a significant difference; on 13th November we paid in $2.4M, we got out $3M; and then on 13th December we paid in $3.3M and we got out $3.6M. That was the state of play for 2013; seven months out of that year we got out less than we put in to VAT and five months we got out more than we put in.

    “We then have the months January, February, March, April 2014, and for two of those months we got out more than we put in and two of those months we got out less than we put in. For example, on 14th January we put in $3.1M, we got out $3.1M. So, in fact, that month was even. On 13th February we put in $2.4M, we got out $2.8M; on 14th March we put in $3.4M, we got back $3.2M; and then on 14th April we put in $3.2M, we only got back $2.5M.”

    He said that following the cheque bouncing fiasco in April, the NIA had not been putting any money into the pool for VAT. 

    “And from May to October the Nevis Island Administration has collected some $18M, which represents an average of just over $3M per month that we have earned in Nevis and that we have kept in Nevis. And when I look at all these months here for the whole year of 2013, six months we got $3M or over, and the year of 2014 we got over $3M twice. Here we are averaging over $3M for the period May to October.

    “Numbers don’t lie and when people start to tell you Nevis is getting back so much more than they were putting in, we now know that is not accurate.”

    Brantley also told his listening audience that the total monies collected for the VAT did not include large companies in Nevis.

    “That does not include all of those big companies...LIME, Digicel, Courts, Builders Paradise, Best Buy, Bank of Nova Scotia, FirstCaribbean Bank, St. Kitts-Nevis-Anguilla National Bank, RBTT, Finco, Dong Fang Supermarket, Charlestown Properties. 

    “You have a whole lot of companies here, major companies who are only paying in St. Kitts. But even though those major companies that are doing business in Nevis, they are only paying their VAT in St. Kitts.”   
     
Copyright © 2024 SKNVibes, Inc. All rights reserved.
Privacy Policy   Terms of Service