Economy

Consumption Tax Proposal Draws Pushback During Economic Development Hearing

A proposal to consider a consumption tax on sales and services, potentially dedicated to specific purposes such as infrastructure and energy needs, became a central point of debate during Friday’s meeting of the Committee on Economic Development, where lawmakers and agency officials were examining paths to economic growth. The discussion emerged from testimony by Bureau of Economic Research Director Haldane Davies, who described the Virgin Islands economy as stable and resilient but warned that long-term sustainability remains threatened by high energy costs, a shrinking labor force, and natural disasters. His suggestion drew immediate concern from lawmakers and economic officials, who questioned whether adding taxes to residents, visitors, or investors would do more harm than good. The question before the committee was whether Virgin Islanders would be willing to pay a consumption tax on sales and services for a set period of time, with the proceeds dedicated to specific uses. Tha...