MercoPress. South Atlantic News Agency

Falkland Islands: Weekly Penguin News Update

Headlines: Survey slams tax system; Kids enhance sea front spot; Loligo industry puzzled by protest response; Govt meets with BAS; Kirchner defeated in Senate.

Kids enhance sea front spotJamel Adeoye, Sinead McGill and Michaela Clifford and their classmates from the Infant and Junior School have been hard at work creating an attractive coastal spot within Stanley. The area by Gilbert House was cleared last year and now the class plans to introduce native plants and build rock features to make it an eye catching part of the sea front. The first phase was carried out on Wednesday with tussac roots being planted. Ali Liddle of Falklands Conservation (pictured with the children) said it was very muddy work, but well worth the effort. Survey slams tax systemBUSINESS confidence in the stability of the tax system has eroded and some companies are feeling pressure to move operations outside the Falklands, a Chamber of Commerce survey has determined. The survey of Chamber members on the current tax policy was conducted following the emphasis the last government budget had on raising taxation. All 90 members were sent a survey questionnaire and a total of 58 forms were returned, representing a 64.4 per cent response rate. A report into the results was sent to members today. Summarising their conclusions, the Chamber of Commerce Council say the failure to achieve the savings agreed in the recent Medium Term Financial Plan has pressured the government into making "hasty and ill-informed increases" in direct taxation, such as the 5% increase in corporation tax last year, the suggestion of a withholding tax, and the 30% increase in loligo licence fees. This, they believe, goes against the findings of the government 'sown 2001-2003 Tax Policy Review and will have long term detrimental effects on the future health of the Islands' economy. The survey shows, the Chamber Council say: "Whether we like it or not, perceptions of high or low taxes are an increasingly important influence on investment decisions. The instability brought about by the poorly researched changes in the taxation system at the last two budgets could restrict the ability of the private sector to expand in the Falklands." According to the survey's findings, there is an almost equal divide in opinion about whether the corporate tax burden is matched by public services which represent value for money. Respondents agree almost unanimously that income tax on employees and the proposed imposition of an employment/MSL tax will cause businesses to review the cost of employing labour and the take-home rewards enjoyed by employees. Almost three quarters of respondents favour a system of lower tax rates across the board, rather than for higher rates but with a number of specific relief's. The survey shows business confidence in the stability of the tax system is significantly declining and the increasing complexity in the tax system is felt to be making it difficult to take major business decisions. There was agreement among one third of respondents that change in the amounts payable under the Falklands tax system in the last budget have increased the pressure to move some operations outside the Falklands. Almost sixty per cent of respondents agree that the amounts payable under the tax and MSL system since the budget would place the Falklands at a disadvantage compared to many other countries. Almost half of respondents could find nothing in the current Falklands tax system, as it affects businesses, which is particularly good. More than ninety per cent of respondents agree that FIG should be creating wealth in the business sector through generous tax relief on investments made. All respondents agree that FIG should properly consult with businesses prior to imposing any new tax demands or changing the taxation regime, while ninety per cent feel that FIG is focused on increasing revenue rather than reducing expenditure, and is damaging the private sector in the process. Loligo industry puzzled by protest response A COUNCILLOR'S response to a protest held last weekend by the owners of vessels operating in the Falklands' loligo squid fishery has caused confusion among the industry. The loligo ships sounded their horns as they left for the fishing grounds on Saturday, Sunday and Monday in protest at the increasing government-driven costs they face. The industry has seen unprecedented increases in the price of fuel - by 70% in the last year and in the order of 300% in the last four years - and is frustrated that this has apparently not been taken into account by the government when setting licence fees. This year the government raised the second season loligo fee by 30%, the second rise of this magnitude since 2006. In an interview with Falklands Radiothis week, Councillor Andrea Clausen said Executive Council (ExCo) recognised there was a need to review the setting of fees but added: "The problem that we have is that we would very much like to understand how the fuel prices are impacting on their businesses and we don't know that. We also have the issue of exchange rates - the fact that fuel is purchased in Dollars which are weak, and sold in Euros which are strong - and when I'm sitting there trying to make a decision I don't have any objective scale, if you like, of how that impacts on the profitability of a business. "...the industries need to be providing that kind of information to the Director of Fisheries so that he can provide us with an objective way of taking into account some of these things." This claim by Councillor Clausen, that a lack of information had been forthcoming, has confused the loligo industry who feel they have already addressed the issue. In their second appeal which was made to ExCo in June 2008, the Falkland Islands Fishing Companies Association (FIFCA) on behalf of the Loligo Producers Group stated: "We have calculated that the increase in fuel price for the second loligo season alone will be around £3 million for the fleet of 16 vessels. This is an average of £188K for each vessel. "On top of this FIG want an extra £1.23 million in licence fees, which is £77K per vessel. In total this is £265K or £211K per vessel." Continued on page 2 Govt meets with BASTHE government's Chief Executive, Tim Thorogood, is to meet with representatives of the British Antarctic Survey (BAS) and the Foreign and Commonwealth Office this week. Councillor Mike Summers said Mr Thorogood would be "exploring all the commercial and foreign policy issues surrounding the intentions of BAS to possibly move part of their operation to Chile." Kirchner defeated in SenateTHE Argentine Senate has knocked out President Cristina Kirchner's farm export tax. After a dramatic 18 hour session, senators were tied 36 to 36 in two votes on the measure, until Julio Cobos, the vice-president, voted against the proposal, breaking the tie. MP