The Value Added Tax (VAT) is here to stay, no matter what the Governor of the Central Bank thinks.
That declaration from Minister of Finance Chris Sinckler just days after Dr Delisle Worrell told reporters the VAT was “a mess”, unnecessary and unsuitable for Barbados and should be scrapped and replaced with “a simple sales tax”.
Rejecting Dr Worrell’s suggestion, Sinckler insisted that fiscal policy was determined by the Cabinet alone and neither he nor Cabinet had received any recommendation from the Central Bank or anyone else that the consumption tax be abolished.
In any case, Sinckler said, he had no intention of getting rid of it.
“Let me make it abundantly clear – the Value Added Tax is the premier indirect tax of Barbados and it shall remain so. VAT has challenges, as is the case with all taxes. I don’t know about any tax that doesn’t have challenges,” he told the House of Assembly yesterday.
Although acknowledging that changes are needed to make the VAT more efficient, Sinckler said he would neither advise nor accept advice that Government should “throw the baby out with the bath water”.
“The Governor of the Central Bank expressed his view, both as an academic and in a personal capacity; he said what he felt about the VAT . . . But let me make it clear, for the avoidance of doubt, fiscal policy is determined in Bay Street not Church Village. Fiscal policy is determined by the Cabinet of Barbados in Bay Street, not in Church Village,” he said.
“We have advice that comes to us and we take advice as it is. We can accept that advice or reject that advice . . . There is advice that is good, bad and some that is indifferent. Our job as elected public officers is to ensure that we weigh everything in the balance and take decisions that we believe are in the best interest of the public.
“It is in the best interest of the public at this time to have a Value Added Tax and that is the tax that is there and long may it continue to be so,” Sinckler added.
Insisting that he would not “jump all over the Governor for his view” which was made public at last week’s Press conference to review Barbados’ economic performance for the first quarter of 2014, the finance minister said he was only seeking to make Government’s policy clear.
“You can’t kill somebody for having a view. That is their view. However much you disagree with it or dislike the person or don’t think you have much value for the person they still should have a view,” he said.
Sinckler therefore called on those in the business community and others in Barbados to “get on with it . . . and stop being distracted by all kinds of side shows in relation to these matters.”
While the finance minister was dismissive of Dr Worrell’s view that the VAT has absolutely no advantages for a tourism-oriented economy like Barbados, the Private Sector Association welcomed the Governor’s suggestion.
However, chairman Alex McDonald also cautioned that careful thought and examination would have to be given to a replacement for the VAT which was implemented in 1997 under a Barbados Labour Party administration led by Owen Arthur. (DP)