Minister with responsibility for sand mining, Honourable John Patrick Osborne has responded to calls for increasing tax revenue on production of the commodity here.
He explains that increasing taxes, prices domestic miners out of regional markets by artificially inflating their production costs without providing equivalent changes in competing jurisdictions.
Minister Osborne highlights that because sand is a high-volume, low-margin, and locally-sourced commodity, price hikes immediately erode profit margins and disrupt long term supply chains.
“Sand mining is the biggest industry in terms of hiring people outside of government. What happens if I put on a tax on the sand that then makes their price no longer competitive with the rest of the region? Because some people have said….you need to double (the levy), you need to increase it whatever amount.”
The agriculture minister says by adding on another $3 per unit, sand becomes more expensive than Dominica, who is a direct competition.
“What happens to our volume locally? Do you think that people are still going to buy Montserrat sand more expensive than Dominica sand, which is actually washed?”
Mr. Osborne stated that some countries like “Antigua see it as a better quality because they’re saying they can finish with it a little bit better. A lot of the sodium is out of the sand when you wash it. We don’t have those facilities.”
Mr. Osborne said he had spoken to the sand miners about doing the same but “apparently, it’s a very big expense to get the sand washing facility. So we can’t look at pricing ourselves out of a market because what’s going to happen is that you’re going to have reduced volume and reduced income anyway if you’re not competitive by price.”