| Tax increases to pay off $22 million in government debts | | Print | |
| Written by Richard Green/richard@fptci.com | |||
| Thursday, 24 November 2011 18:42 | |||
 Most of the new taxes to be imposed Dec. 1 will go to pay off about $22 million in old government debts, mostly for overseas health care. Interim government CEO Hugh McGarel-Groves told the fp that a variety of “unbudgeted historic payments” mainly for health care debts totaling $7.5 million were paid during the first half of the fiscal year, and another $3.2 million is expected to be paid during the remainder of the year. Most of the debts are to U.S. hospital groups. The government had owed $3.5 million to Jackson Memorial Hospital in Florida, but that amount has been agreed to be settled for $1.2 million, McGarel-Groves said. Another $3.4 million was budgeted for historic debts, mostly to South Miami Hospital and Herzog Caribbean Ltd., he said.  Herzog took legal action against the government in January to collect more than $13 million allegedly owed to the contractor for road construction. Government had expected to settle some of its other debts without cash payments, but some of those did not work out. Another $1.5 million will be go to payment plans with Provo Airport Company and FortisTCI. Fortis turned off power to some government schools and offices June 13-14, saying government owed it $3 million, $1 million of that for electricity. Land acquisition for the expansion of the Providenciales International Airport was planned to be settled with land swaps, but government is now having to pay $2.9 million in cash, McGarel-Groves said. Another settlement not expected to involve cash but now will be paid includes $1.4 million to Air Turks and Caicos for unpaid airline tickets. Also, $750,000 will be paid for back rent for rent on government buildings. These debts, plus delays in implementing new tax measures and reducing the cost of the civil service, inflated the projected $8.5 million deficit to $35 million for 2011-12. On Nov. 16 the government announced the following tax increases to take effect Dec. 1:
Photo: CFO Hugh McGarel-Groves (right) announces new taxes.
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