80.3 F
Charlotte Amalie
Sunday, February 5, 2023
HomeNewsArchivesA Sales Tax Makes Sense

A Sales Tax Makes Sense

Dear Source:

The reference to creating a sales tax for the Virgin Islands is a good one. It would not be ANOTHER tax; it would REPLACE the non-conforming and possibly idiotic gross receipts tax. Even government revenue officials know that there is a flaw with the GRT because most people cheat and a mere 50% of what is owed is ever collected. Not to mention the enormous paperwork it requires on the part of both the submitter and the IRB. Doing away with it would be a good move because most taxes occur at the point of sale.
The government could require that not only the tax but the actual amount of sales would be forwarded to the IRB on not more than a bi-weekly basis. In this way, not only would the government have a better idea of what actual point of sale receipts are but would also quickly collect those taxes. If done properly, the government could require each vendor, to submit bi-weekly payments in order to maintain the license to do business. This is not different with the present GRT law that requires a tax report in order to renew a license. Electronic transfers greatly reduce paperwork and almost all vendors have this capability. If not, the law could require an escrow with the only purpose to maintain sales taxes. Also, certain essential purchases such as medicines, medical treatments and food could be exempted by law. In addition, if the law would provide it, certain luxury items could be exempted so as to not curtail tourist spending as a "duty free" zone. It's worth having a look at.
I think tourists are used to paying sales taxes as almost every state and most countries require them. A 5% tax is not unreasonable, would bring in greater revenues, would bring them in faster for better cash flow and would eliminate the bothersome GRT paperwork, which most employers hate!
I am strongly in favor of a change in our tax system, which requires a sales tax.

Paul Devine
St. John

Editor's note: We welcome and encourage readers to keep the dialogue going by responding to Source commentary. Letters should be e-mailed with name and place of residence to source@viaccess.net.

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