Madame Speaker, after maintaining work permit fees at the same level since 1981, the BVI Government has amended the work permit fee structure to one that is progressive and based on income. The new fees have been agreed upon by Cabinet and the changes will become effective on May 15, 2017.
Under the new fee structure, special consideration has been made for domestic workers; they will pay 1% of annual salary. For all other workers, the fee for earnings up to $25,000 will be charged at 3%; the fee for earnings from $25,001 to $50,000 will be calculated at 5% and the fee for earnings above $50,001 will be calculated at 7%. Earnings in excess of $150,000 will also be charged at 7%. There will be a fee cap at $10,000 which means that no work permit will cost in excess of $10,000.The new fee structure also introduces a $50 application fee in addition to the $75 fee that is currently charged for issuance of the work permit card.
With the new structure requiring higher income earners to pay higher fees, we recognise that there is a potential risk for persons to understate their income to benefit from lower work permit fees. However, we have taken steps to discourage this practice by including a penalty of ten percent (10%) of annual income for understating income. It must be noted that Government did not arbitrarily raise work permit fees; we consulted with industry practitioners.
You would recall that the Honourable Premier first spoke about increased fees when he delivered the 2016 budget and in December last year, he announced that the changes will take effect in 2017. Immediately following that announcement, government officials initiated talks with various industry stakeholders to determine the most equitable fee structure that is reflective of employee earnings. We had stakeholders from financial services, the accommodation and beverage sectors of the tourism industry, construction and legal sectors as well as the marine industry among others. There was a collective approach to increasing work permit fees, we did not do it in isolation.
Madame Speaker, it is important to note that Government is taking steps to give customers better value for money. As we prepare to increase work permit fees, the Labour Department has already started implementing measures to improve operational efficiency and improve customer service. The officers of the Labour Department have been working with staff of the Financial Services Implementation Unit to implement ways to improve customer service through more efficient processing. One of the changes made thus far is the faster processing of work permit renewals. Persons seeking renewals can now expect their applications to be processed within two weeks. To help facilitate this process, the Labour Department is introducing a new single-page work permit renewal form which replaces the First and Second Schedule application that was in use since the Labour Ordinance, 1975.
Madame Speaker, the department will be moving to process new work permits within four weeks. This will require us to streamline processing with the Department of Immigration. These changes fall within the remit of the BVI Forward campaign under the initiative to Reform Immigration and Labour. However, the changes must become institutionalised within the respective departments so that Government can continue to reap the benefits of investing in the financial services consultancy and the implementation programme which followed.
Madame Speaker, the public can expect more details as we continue to refine plans for process improvements. In the meantime, we want to assure the residents of this Territory that the Labour Department is fully committed to providing the best possible service.
The work of the Labour Department is very important in this Territory as it relies heavily on non-local labour. It will therefore take on added significance as the enabler of employment relations in the BVI. The Labour Department will continually aim to provide efficient, world-class, business-friendly, customer-oriented service.
Thank you Madam Speaker.