To the Editor
The Anguillian

Dear Sir,

There is much talk these days in the media about the increasing cost of fuel and food. Inflation is already starting to inch up in those countries which are dependent upon imported goods and Anguilla is no exception.

Those of us who were living in Anguilla in December 2003 will recall that our Minister of Finance introduced a temporary import duty surcharge of 1% on all goods on which an ad valorem duty is levied. I quote from his budget speech:
“An additional 1-% duty will be charged on the CIF value of all imported items carrying an ad valorem rate. This will not affect developments that have specific duty exemption agreements. This is a temporary measure that will be reviewed when fiscal stability is restored. The impact of this on any one item will not be very significant. The revenue yield from this measure is estimated at $2.3 million. This measure is to be used to build reserves and together with other measures should yield reserves of over $4.0 million.”
Our government has received a windfall gain this year due to the rising price of fuel that has increased freight costs significantly. Our duties are calculated on the imported value of the goods plus their freight cost. So every time freight increases by $10 the government would receive an additional $2.50 in revenues if the rate of duty is 25%. The stores have no choice but to pass this cost onto the consumers who are not only hit by the increased cost of goods and shipping but also by the increase in import duty.
Do we now have fiscal stability? Is it time for the Government to re-examine this temporary measure so it can help reduce slightly the rise in prices in Anguilla?

- Name withheld at writer’s request

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