Q&A: Economy, taxes, & investment

Washington Misick, Minister of Finance, Trande and InvestmentAn interview with Minister of Finance, Trade and Investment, Washington Misick.

In mid 2013, the Turks and Caicos Business Guide sat down with the Minister of Finance, Trade and Investment to find out what he foresees for the short and long term future of the local economy.

 

What is the current status of the local economy?

I think the economy looks healthy in the medium-long term. In the short term, we have to bite the bullet, because we have the debt we inherited, but we are making significant steps towards returning that. We will be contributing $41 million to the Sinking Fund this year, out of a debt of $170 million.

 

What can we expect for the next financial year?

We are obliged to submit a balanced budget, so the 2013/14 budget will show some growth, both in terms of revenue and expenditure, but we will still end up with a surplus. The larger portion of which will again go towards the Sinking Fund to reduce the debt load.

 

A proposal to implement VAT was repealed in April, what measures are now being considered to meet revenue projections?

We are in the process of establishing a Blue Ribbon Commission on taxation or revenue, that will review the current revenue regime. With that, we may see an adjustment of some of the current taxation measures or complete elimination of some. The aim is to simplify the structure so that the tax base is broader, but fairer.

 

Does this mean raising taxes?

I don’t expect any increase in taxation per say, what I expect is a rationalization of the structure, which may result in some of the smaller more expensive to collect tax measures falling away. Our intention is not to increase the tax burden at all, but to make sure everyone pays their fair share.

 

What are the main capital infrastructure projects planned for 2013/14?

In the 2013/14 budget, capital investments total $14.5 million, of which more than half is already committed to three main areas: North/Middle Caicos Causeway, acquiring the necessary land surrounding the airport to accommodate the expansion and social infrastructure investments that are going to have a long-term impact.

 

Looking into the future, the government has suggested some larger investment plans, such as a sea port in South Caicos. Why?

These are long-term strategic decisions TCI government has to make to reduce the barrier of getting into business and to be able to maintain and encourage investment, because there will be population growth and if we can spread things out more, all of the islands benefit.

 

What is your plan to encourage outside investment into the Turks and Caicos Islands?

Our plan is to create as friendly as possible the investment environment so that the growth will be private sector led, as it should be.

 

The Investment Policy 2012 is currently under review. What is the focus for the short term?

Making sure the jurisdiction is competitive, that the document is comprehensive and detailed enough, because businesses are of different sizes and require different levels of assistance. Also, in order to encourage local investment, adding incentives for the local business community to grow.

 

What other areas are you looking at improving?

Streamlining immigration – such as developing immigration protocols with some of the larger developments, so their immigration requests can be fast tracked.
Creating policies that would encourage people to domicile some of their companies here – particularly regional operations.
Creating incentives for technology parks, where companies or educational institutions can undertake research and development.

 

How do you envision the future relationship between investors and the government?

We are working to create a more robust, focused on a one-stop shop strategy, investment agency. Creating one place investors go to make all their submissions, and get all their results.

 

What future projects are you looking to entertain for the Turks and Caicos Islands?

We are identifying zones of what can be done where, but in the confines of those guidelines, I think we have to be open to new ideas. We don’t want to have a situation where the tail starts to wag the dog, but we also cannot be afraid of setting trends.