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Senator Vialet Concerned About The Rate Used to Calculate Rum Tax Cover-Over Payments

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Senator Vialet

The U.S. Department of the Interior’s Office of the Insular Affairs recently announced the approval of payment to the U.S. Virgin Islands for rum tax cover-over in the amount of $226,165,037. While the announcement is welcomed news, Senator Kurt Vialet is very concerned about the rate used to calculate the Territory’s return. The Senator noted that a rate of $13.25 was utilized in previous years which expired as of December 31, 2021. The Virgin Islands is now reimbursed at a rate of $10.50 which is alarming.

Vialet’s main concern is the recent “Special Purpose Vehicle” which was structured at a rate of $13.25. Reimbursement based on a rate of $10.50 leaves a void of $59,233,700 which was earmarked for the Government Employees’ Retirement System (GERS). The Senator encourages the Administration and the Delegate to Congress to petition Congress to permanently reinstate the rate of $13.25.

This recent development once again places the GERS in a precarious situation. “As Chairperson of the Legislative Committee on Finance, I pledge to do everything possible to continue to support GERS,” said Vialet.