One hundred million dollars more in taxes!
That is what Opposition Leader Mia Mottley is telling Barbadians they can expect to be imposed on them during the coming fiscal year as a result of revenue-raising measures announced by Government in the House of Assembly this afternoon.
Describing the measures as an ambush, Mottley said proposed new energy taxes comprising the removal of the subsidies on diesel and a 20 cents increase in excise taxes on gasolene from April 1, will in reality also affect households.
Responding to Minister of Finance Chris Sinckler, who led off debate on the 2014 to 2015 Estimates Of Revenue And Expenditure, Mottley suggested that the new taxes will force some people to put down their cars and push owners of enterprises who rely on their vehicles to transport commodities, to the brink of insolvency.
“The Government has runaway expenditure, but worse, an implosion of revenue, our revenue has collapsed. And as a result of the revenue collapsing, expenditure still up in the vicinity of $3.8/$3.9 billion, the financing of Government deficit, has become the most critical problem facing this country, so that you move now from unsustainable fiscal deficit to a financing problem, that by reason of the choice or manner of financing, short-term financing through treasury bills by the Central Bank printing money, the reserves have been put under pressure,” the Opposition Leader asserted.
“What is of more concern is that if you could not achieve $120 million adjustment in seven months announced in the budget in August; $88 million in expenditure cuts, and $36 million in revenue, how, pray tell, are we going to achieve a $510 million adjustment in 12 months?” the Barbados Labour Party MP declared.
She suggested that the $120 million adjustment meant that banks and other financial institutions, which would now be subjected to increase taxes on their assets, will pass them on to consumers.
“I could paint it, Sir, for every person who is now paying the consolidation or stabilisation tax since September 1 and whose disposable income continues to contract and who wonder ‘how much more can you take out of me, how much more can you tax out of me?” Mottley contended.
“And for those who feared that question, if they listened to the debate this morning would hear that the Government did not believe it had reached its limit of taxation; more taxes coming,” submitted the BLP political leader.
“More taxes coming on every single consumer,” she continued, “because when you tax and increase the excise tax on gasolene, you effectively tax the entire economy, every household, every enterprise, because all goods and services that rely . . . not all fleets use diesel vehicles . . . [because] the removal of the diesel from April 1 means there is a corresponding increase in the cost of diesel for all PSVs, for all agricultural farmers.”
Mottley noted that a letter from Rubis, which she offered to make a document of the House, was sent out to all farmers, informing them that from April 1, 2014, the subsidy of 23 cents per litre, would cease immediately.
“So that every farmer, every fisherman and every public service vehicle must now pay 23 cents more per litre, for every litre of diesel; so even if the Minister of Finance does not impose the increase in excise on diesel, all diesel vehicle in those areas of the productive sector will face an increase equally, from April 1,” the former Minister of Economic Affairs argued.
She warned that if Barbados needed private sector-led growth, Government could not tax enterprises into oblivion. She also cautioned that credit unions, whose assets are to be taxed, may also find ways to pass on such charges on their members.