St Helena : St Helena EXCO Report (10.02.09)
Submitted by Saint Helena Herald (Juanita Brock) 11.02.2009 (Article Archived on 25.02.2009)

Today’s meeting of ExCo started earlier than usual, at 8.30 am. This was to give Members an opportunity to take part in a teleconversation with Governor Gurr in London, before he started his daily round of key meetings.

EXECUTIVE COUNCIL REPORT 10^th FEBRUARY 2009

Today’s meeting of ExCo started earlier than usual, at 8.30 am. This was to give Members an opportunity to take part in a teleconversation with Governor Gurr in London, before he started his daily round of key meetings. Councillors enjoyed a lively and positive exchange with the Governor on the airport project and other issues, and the Governor confirmed that he would make another statement to the media on Saint Helena tomorrow.

The first item on the main agenda was the Income Tax Bill. There has been a great deal of public discussion and debate about this important measure. Its purpose as originally drafted was to simplify and modernize the existing law, and also to make the system fairer by making sure that people earning the same level of income paid the same level of tax.

Since its initial publication, elected Members of both Councils have put a great deal of effort into refining its provisions to make it workable for and fair to ordinary Saints. For example, the current exemption of interest paid by the Bank of Saint Helena has been retained; provision has been made for tax on dividends to be reduced by Resolution of the Legislative Council; capital losses on disposal of business assets will be allowable against tax, as will contributions to approved pension funds; and other business expenses such as charitable donations will also become tax deductible.

The tax system will also become more user-friendly, with individual tax returns no longer required by most employees; more time will be given for objecting to an income tax assessment; fewer PAYE returns will be required from small employers and so on.

A particularly encouraging development is that the Income Tax Office has, over the past few months, seen a significant increase in voluntary compliance by those who are liable to pay tax. This is not only good news in principle for the majority of law abiding tax payers. If the Bill is passed into law at the start of the next financial year, the Government believes that this momentum of voluntary compliance can be maintained. This in turn will provide additional revenue which will enable us to raise the existing personal allowance from £2,500 to £3,000 and to raise the level at which the higher tax band takes effect from £5,000 to £6,000. This will put more money into the pockets of Saints, and shows that a new tax law can be quite an attractive thing!

Finally, although most of the Bill’s technical provisions will have little or indeed a positive effect on most tax payers, it was recognized that some businesses might reasonably need adequate time to understand and adjust to the new system. Thus, while the intention is to bring the concessions on personal allowances and tax bands into effect from 1^st April this year, the other provisions of the legislation will not be implemented until 1^st April 2010.

On this basis, Members agreed that the Income Tax Bill could be endorsed and published for public consultation.

Members then turned to proposed increases in a number of fees and charges. These increases were modest, and in most cases desirable to maintain key public services with allowance for inflation. Members considered, however, that more information was needed before they could consider the proposals in context, especially in view of the current economic climate. Consideration of the increases was therefore deferred to a subsequent meeting.

Two other, relatively straight forward proposals were endorsed. The first was to decline a request to waive Landing Fees in respect of a particular vessel, where it was felt that insufficient justification had been given. The second was to approve regulations to allow the police the authority under law to cultivate a limited number of Cannabis plants to help in the training of police dogs to combat the problem of on island growing of this drug.

There were also two items of Any Other Business. The first related to the public meeting held under the Chairmanship of the Hon. Eric Benjamin on 4th February at the Consulate Hotel to discuss issues related to the young folk of the Island. Public attendance was high and the atmosphere very positive. I was able to inform Members that the Social Development Planner, Ann Muir, was in the process of collecting feedback from participants, so that a practical way forward could be worked out.

Lastly, I thanked Elected Members of both Councils; the Hon. Mrs. Cathy Hopkins, MBE (President of the St. Helena CPA), the Hon. Mrs. Ethel Yon, OBE (Secretary of the St. Helena CPA) and all the other officials and members of the public who had worked together to make last weekend’s visit by the Commonwealth Parliamentary Association delegation from the UK such a success. It was clear the delegates had left Saint Helena as enthusiastic advocates of the island’s future, and would play their part in trying to secure a more favourable outcome on air access.

The meeting ended at approximately 11.45 am.

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