Economist Calls for Gross Receipts Tax Reform and Lower Tax Incentives; Wayne Biggs Defends Current Model

A difference of opinion on the efficacy of the territory’s tax incentives arose when the Committee of the Whole met to discuss the USVI’s cost of living crisis on Monday. Economist Mark Wenner, in his testimony, suggested several changes that could positively impact the cost of living in the territory, including diversifying the economy and weaning it from the current reliance on the tourism sector. The tourism sector, like the burgeoning construction sector, contributes greatly to the territory’s gross receipts taxes. However, Mr. Wenner contends that a “tax structure that includes heavy reliance on a 5% gross tax receipt” is not proving particularly effective. “Great care needed to be used in studying how to replace the gross tax receipt system with a sales tax system,” he offered. Diversifying the economy will include improving the business environment climate, said Mr. Wenner. However, he told lawmakers that the “current business attraction model that is based on 90% tax abatem...