Local Chamber Opposes Increase in Gross Receipts Tax

The president of the St. Thomas-St. John Chamber of Commerce warned Rotary St. Thomas Sunrise members this week that the organization would oppose the governor’s proposal in Monday’s State of the Territory address to increase the territory’s gross receipts tax from 4 percent to 5 percent.

Chamber president Richard N. Berry told the group that while he understood the proposed tax increase to business owners was intended by deJongh as a temporary measure until a new sales tax could be established, the chamber was solidly against it.

On Wednesday, the Chamber released a statement from Berry who said, much as he had earlier this week, that gross receipts—paid solely by the business owner, but passed along in the cost of goods and services to the consumer—are “in essence … stealth taxes that hide their true costs from the consumer.”

He said the proposal comes at time when the chamber’s members are hurting from the global economic downturn and suggested that the government go after delinquent taxpayers instead of further burdening those who do pay their taxes.

“The public sector must implement measures to collect the gross receipts tax from all segments of the community, which we believe will have a material impact on closing the budget shortfall, instead of placing additional burdens on those businesses that adhere to the current system,” Berry said in the release.

Berry said Tuesday that because the gross receipts taxes are indelibly tied to bond issues and other borrowing, it was not going to be easy to switch to a straight sales tax, something that many feel is the fairest taxation method.

Berry agreed with the government’s assessment of the precarious nature of the V.I. economy. “The State of the Territory address serves as an urgent reminder that the ‘business as usual’ mentality cannot continue,” Berry said in the release, adding, “The competitive advantage we had in the past has eroded; and if we are not careful it will pass us by.”

In other matters related to the governor’s proposals, Berry voiced his support for deJongh’s plans to merge several government agencies but wanted to see a “blueprint” on “how each surviving entity would function” and the specific savings and service improvements.

The statement outlines further initiatives the Chamber supports, which include:
− a better prepared work force;
− increased investment in technology and tech jobs and job training;
− well-funded, cohesive and aggressive economic development efforts, including continued investment in tourism;
− a business incentives policy that provides opportunities for small business development, especially in our downtown areas;
− promoting business ownership with emphasis on diverse demographic groups like women, veterans and other underrepresented groups.

“We, as a territory, cannot continue on our historical path, and we applaud the governor for creating a road map for a new way forward; and we are willing to help support the government with initiatives that will improve quality of life for Virgin Islanders and grow our economy together,” Berry said.

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