While welcoming aspects of today’s Budget, local tax expert, Charles Tibbits, has expressed concern about unfinished business from previous presentations by Minister of Finance Chris Sinckler.
Speaking to Barbados TODAY moments after Sinckler completed delivery of the 2013 Financial Statement and Budgetary Proposals, Tibbits said:
“The measures announced may have come too late to address the deficit problems we have and which we continue to experience. What is missing from the speech are details of the proposed sale of the 30 per cent of the shares of Grantley Adams International Airport Inc., the oil company and Bridgetown Port Inc., and the listing of these companies on the Barbados Stock Exchange that were announced in last year’s Budget.
“This was a Budget that saw the resurrection of measures announced some five years ago and not implemented. One measure announced in 2008 and not yet implemented is the cell phone tax. Are we to expect this at some later stage?”
Speaking of “welcomed measures” he noted:
“The one major measure that is welcomed is the establishment of a business facilitation unit. However, such a unit needs to be free of political interference
“The reduction in the current VAT rate on Tourism Accommodations and direct services to 7.5 per cent is a welcomed measure and will now enable the direct services to reduce the cost of their services to the visitor to be reduced.”
My comments on other measures are:
“1. As to the reduction of the reverse tax credit, this will have a significant impact on low income families who are dependent on such assistance.
“2. The reduction in discretionary waivers on import duties and excise tax, ranging from zero per cent to 100 per cent should not be left to the discretion of the Minister of Finance.
“3. The 15 per cent tax on lottery winnings of $1,000 and over is an initiative from 2008 that has taken five years to resurface.
“4. We hope that the introduction of a 0.7 per cent municipal solid waste tax on the non-improved value of land instead of the greening levy proposed last year should not take as long to implement as did the decision to scrap the greening levy.
“5. The introduction of a temporary tax on the assets of commercial banks at 0.20 per cent will no doubt be similar to the tax on bank assets that was eliminated when the deposit insurance scheme was introduced. This will no doubt result in an increase in the cost of doing business with commercial banks.
“6. We need to know the number of workers that will be affected by the reduction of temporary post/employees and the reduction in transfers and subsidies to the Transport Board ($15.0m); NCC ($6.0M); UWI ($42.0M); QEH ($35.0M); BAMC ($12.0M); SSA ($30.M) and a reduction of $20 million in the amount ($29.082 million) allocated in the 2013/2014 Estimates for acting allowances/substitutes.
“7. A temporary consolidation tax on gross income of persons earning $50,000 and over. To be applied as follows: $50,000 to $75,000 (0.5%); $75,001 to $100,000 (1.0%); $100,000 to $200,000 (2.5%); and over $200,000 (3.5%). This is almost like the stabilisation tax we had some 22 years ago. We just hope that such a measure will in fact be temporary.
“Details of when this tax is to be collected were not announced and if there would be any persons who would be exempted from paying it. We also need assurance that the tax will in fact commence after August 13, 2013.
“8. Imposition of increased fees for university students. More has to be done to ensure that the UWI expends funds on teaching persons who will be able to find jobs at the end of the day and be able to repay the costs incurred.” (RRM)