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Anguilla's Budget Provisions Questioned By UK

by Mike Godfrey, Lowtax.net, Washington
19 January, 2016

Legislation to implement reforms announced in Anguilla's Budget has been temporarily blocked by the island's Governor, who is the UK Government's representative and head of state.

Seven pieces of legislation were passed by the House of Assembly during December 2015. Four of these Acts, which give the Government of Anguilla power to raise certain taxes, have received assent, and are now enacted in law. These are the Interim Stabilisation Levy (Amendment) Act 2015, the Control of Employment (Amendment) Act 2015, the Vehicles and Road Traffic (Amendment) Act 2015, and the Property Tax Act 2015. As a result, from January 1, 2016, the Government of Anguilla has had the legal power to collect taxes as set out by the legislation.

However, three laws have yet to receive Assent, following concerns raised by the Governor. These are: the Banking Act 2015, the Eastern Caribbean Asset Management Corporation Act 2015, and the Appropriation Act 2015.

In a January 13 statement, the Governor said: "The Banking Act 2015 provides for the regulation of banking business in Anguilla, and repeals the existing Banking Act. Its sister legislation, the Eastern Caribbean Asset Management Corporation Act 2015 gives legal effect to the Agreement establishing the Eastern Caribbean Asset Management Corporation (ECAMC). Together, these 'Banking Acts,' give powers to the Eastern Caribbean Central Bank and the Government of Anguilla to take the steps necessary to resolve the issues in relation to Anguilla's domestic banks, with the aim of ensuring a resilient banking sector for Anguilla."

"As the Chief Minister has explained, the proposals he wishes to adopt for resolving the current banking difficulties require the Government of Anguilla to borrow more money from the Caribbean Development Bank. They may also result in additional costs to the Government of Anguilla in starting to repay loans that would begin to fall due in 2016. As a result, it is clear that the Appropriation Act and the Banking Acts are closely related."

"I have not yet given my assent to either the two Banking Acts or the Appropriation Act. Discussions continue between the Government of Anguilla and the UK Government on a number of areas of important detail likely to affect Anguilla for at least a generation. This is resulting in a delay to the assent of the legislation, but it is a delay of necessity. UK ministers and I want to be satisfied that the resolution plan that is implemented is both affordable to the Government of Anguilla (and hence the Anguillian taxpayer who must pay for it now and in the future) and sustainable (so that banks in Anguilla do not get into difficulties in the future)."

In particular, she said "the UK Government has asked that, before agreeing to the additional borrowing required, the Government of Anguilla sets out how it intends to return to compliance by 2025 with the borrowing limits set out in the Fiscal Responsibility Act 2013. This matters not just because it is the law, but because it is important that future generations are not burdened with unsustainable debt and Anguilla is able to invest for growth in the future."

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