The VIP government faced strong opposition in the House of Assembly on Friday when they introduced the Financing & Money Services (Amendment) Act — legislation that seeks to tax monies that leave the territory through wire transfers.
Opposition Leader Marlon Penn described the Bill as being ‘punitive’ to the territory’s working class. He further said the Fahie administration needs to find other ways to cut government expenses and generate revenue.
“We have to create efficiencies in the system. The system has become a burden,” said Penn who placed on record that the roughly one-year-old Fahie administration was not to be blamed.
“Putting a tax on our working-class people are not going to fix the systematic problems that we have in our system. Our efforts are better put if we address the inefficiencies in our system. We need to rethink this, rethink our approach. But, not on the backs of persons who struggle, who all they want to do is take care of their families that they left behind,” Penn argued.
The Opposition Leader further said these proposed taxes could force persons to take their activities ‘underground’.
Turnbull displeased too
Opposition legislator Melvin ‘Mitch’ Turnbull also said he cannot support the proposed tax, even if the purpose for which it is intended is ‘noble’.
Turnbull, who has worked more than eight years in the money services business, said this new fee would mean imposing additional levies on monies that would have already been taxed.
“If I look and do some calculations, the average person living in this territory is supposed to pay eight percent on their income — four percent on Social Security [and] 3.75 percent on National Health Insurance (NHI) — and now seven percent on the monies that they would have to send out of this country,” the Second District Representative reasoned.
He added: “There is an additional five percent that is charged by the merchants of these money services businesses per transaction. So, based on the rough calculations that I did, we are looking at persons that would be sending monies out of this country having a tax of 27.75 percent [overall].”
“These monies that persons are sending out of this country have already been taxed, so how are we now coming again to pass legislation to tax money that has already been taxed?” Turnbull further questioned.
‘I can live with this decision’ — Premier
Responding to the Opposition, Premier Andrew Fahie said he is happy with the new measure being proposed; considering the monies collected will go towards social welfare.
“The question is; can I live with $0.7 cents on every dollar going towards the seniors, education, the fishing industry, the farming industry and to first-time landowners and homeowners? I search my soul, and the answer is ‘yes’. I could live with it,” the Premier declared.
“So, while I listen to everyone and I respect their opinion, I respect the debate, I don’t feel like I am doing anything wrong. I feel like I am doing something to protect the very entities that we need to build this country and those who had helped build us,” he added.
‘Persons sending monies are not poor’ — Labour Minister
Labour Minister Vincent Wheatley who, like other government legislators, rose in support of the legislation, commended the Premier for ‘having the tenacity’ to introduce the tax.
He said the monies that leave the territory through wire transfers annually amounts to nearly a tenth of a billion dollars. He used that collective sum to suggest that persons in the BVI who send monies abroad are not impoverished.
“They look at it as some kind of evil thing we are here doing; making you feel as though you punishing the poor man. You’re making him pay seven cents on the dollar. You all telling me poor people sending out $89 million out of the BVI in one year? Poor people? Come on,” Wheatley counter-argued.
Even though the Financing & Money Services (Amendment) Act successfully passed in the House, it must now be assented by the governor to become law.