Your Tax Break Is My Tax Increase

The UK government has just installed Direct Rule over the Turks and Caicos Islands as a result of a report to the effect that there has been widespread corruption, and extensive malpractice in its governance. The Islands are one of a number of tax havens in the region dependent on the finance sector, tourism, and all that goes with these activities. Wikileaks has a good deal of information. There is little or nothing to be found in the UK Media, despite so much of our wealth being churned around the many computer servers on the Islands.

Many of the locals are not happy, and have declared their opposition to British Rule. Quite how far they will go is yet to be decided. It all looks very messy. They now want to throw off the yoke of colonialism, and the last thing our Government needs is another messy potential military commitment, especially in the Caribbean.

What is not mentioned is one of the other local difficulties that came to light this week with the lost of a Haitian vessel full of refugees off the Islands. The tragedy of Haiti has led to large numbers of its people taking small boats to reach other places and the many other communities in the area and Florida now have a substantial Haitian underclass who do the low paid work and live in very poor conditions. But at least they can find food.

Just before the crisis emerged the Institute of Directors urged upon the Government and the Chancellor of the Exchequer that instead of clamping down on tax avoidance (and evasion) the UK should actively compete with tax havens in a race to the bottom for tax breaks for the wealthy and the high rollers.

This is what they mean, culled from a Turks and Caicos web site:
NO INCOME TAX
NO REAL ESTATE TAX
NO CAPITAL GAINS TAX OR CAPITAL TRANSFER TAX
NO VALUE ADDED TAX
NO ESTATE DUTY TAX OR INHERITANCE TAX
NO GIFT TAX
NO LAND TAX
NO WITHHOLDING TAX
NO TAX TREATIES AND THEREFORE NO EXCHANGE OF INFORMATION WITH FOREIGN COUNTRIES
NO EXCHANGE CONTROLS, NO RESTRICTION ON HOW MUCH CAN BE BROUGHT IN OR OUT OF THE COUNTRY
ECONOMICALLY & POLITICALLY STABLE
STRICT SECRECY LAWS
BRITISH DEPENDANT TERRITORY
IDEAL CLIMATE & GEOGRAPHICAL LOCATION
EXCELLENT COMMUNICATIONS SYSTEM
LAWS CONDUCIVE TO CONDUCTING BUSINESS IN A TAX FREE ENVIRONMENT

Oh my word, if the Government followed the Institute of Directors recommendations that our nation should follow the example of the Turks and Caicos Islands just how would UK budget be managed, notably the large fiscal deficit, given the impact on revenues?

But if we now have direct rule, perhaps the Government should make it a UK local authority, and part of the UK, much as the French do with some territories, freeze all the accounts and levy taxes accordingly. Then things will get really interesting.

Are the Royal Marines on standby?