July 23, 2014
The Rt Hon. Freundel J. Stuart, QC, MP
Prime Minister’s Office
Dear Prime Minister,
I am writing to convey to you a formal request for the urgent rethink of the Municipal Solid Waste Tax, passed in Parliament and assented by His Excellency the Governor General on 14th April, 2014, and for the establishment of a new governance mechanism to allow for the forging of a national consensus on the adjustment, which we as Barbadians must make as a country to avoid the bleak future, that as recent as yesterday, Moody’s painted a picture of despair for Barbados.
Over the course of the last six weeks, members of the Barbados Labour Party have been meeting with persons across the country and across the various sectoral interests. The message has been virtually the same: Barbadians do not support this tax.
In your capacity as Prime Minister, and even more so as the representative of the people of St Michael South, you will be acutely aware of the anguish this iniquitous tax is causing the tens of thousands of Barbadians who have sacrificed and saved to fulfil their dream of owning a “piece of the rock” after successive Governments have encouraged them so to do.
They protest, not because they are irresponsible freeloaders, but for the simple reason that they recognize that the Municipal Solid Waste Tax is an unfair imposition on a specific sector of society (namely property owners with buildings) and that they no longer have the wherewithal to satisfy the draconian demands of this, the 28th tax or fee imposed upon them in the last six years.
The Municipal Solid Waste Tax in the view of people is arbitrary, ill-conceived, excessive, disproportionate and patently unjust. It asks too much of too few to solve a problem to which all contribute.
It places a disproportionate burden on:
- The working class who are already struggling to keep the modest plot and house they own.
- The farmers with a small structure on larger acreage which generates minimal waste in proportion to its size.
- The middle class homeowners burdened with debt from other taxes and with the prospect of further debt if they hope to keep their families healthy and send their children to university.
- The cash-poor pensioner already reeling under the cost of food, medicine, transportation and basic utilities.
- The hotels and local businesses required now to pay tens of thousands more, when they have not budgeted for the same.
- Churches, charities and non-profit organizations who will now have to divert resources from their community programmes to meet this new demand.
The tax is patently unfair and draconian because:
- Using 0.3 per cent of the site value of the land as the basis for calculating the tax owed bears no relationship whatsoever to the amount of garbage produced by that particular plot, and takes no account of the size of the household.
- It therefore goes against the internationally accepted “polluter pays principle”, where your liability is proportionate to the waste you generate.
- It does not affect tenants, only property owners, hence commercial banks and other foreign-owned large businesses which operate from rented premises will not pay this tax.
- The average household and business tenant however, is likely to be impacted when the private landlord is forced to raise the rent to cover this new expense.
- By your own calculations, this tax will collect $51 million, more than twice what is needed to meet Government’s 2009 contractual obligations of $23 million to SBRC for processing our household garbage.
When the Municipal Solid Waste Tax was first announced, at a rate of 0.7 per cent by the Minister of Finance in his Budget presentation last August, we warned of the drastic impact it would have. We asked the Government then to go back to the drawing board. One of your Ministers publicly agreed with us and indicated that it was a mistake –– an assertion that the Minister of Finance rejected at the time.
Whether as a result of these initial warnings or otherwise, the rate was eventually reduced to 0.3 per cent. By some mathematical miracle your estimate of the revenue the tax would generate actually climbed by some 2 million dollars from $49 million to $51 million even though the rate of tax was cut by more than half.
When in the latter half of June, landowners began to receive their bills and to hear the strident threats of the Commissioner of the Barbados Revenue Authority as to the fines and interest to which they would be subjected if they did not settle with immediate effect, Barbadians finally realised the enormity of the injustice perpetrated on them, and reached out to us for help. This was further compounded by the attempts to introduce a new “Tax Clearance Certificate” without lawful authority to do the same.
It is my solemn duty as the Leader of Her Majesty’s Loyal Opposition to respond to the concerns of our citizens, and where necessary to defend their rights against the excesses of the Executive. We must and will speak out against ill-conceived policy, unfair legislation, oppressive taxation and poor execution. All four coincide in this odious Municipal Solid Waste Tax.
I am aware that landowners’ outrage and public pressure have caused your Cabinet to offer some minor concessions to pensioners and farmers. These do not go far enough, nor do they do anything to spread the burden more equitably. They merely compound the confusion and uncertainty.
In the specific case of pensioners, the percentage whose combined land and house value (the improved value) falls under $190,000 in today’s market is likely to be very small. Likewise, the rolling back of the deadline, while welcome, does not ultimately alter the taxpayer’s excessive liability by December 31st of this year. Moreover, it creates another anomaly, which has caused those who have already paid up in good faith to ask whether they should not now qualify for a discount.
Neither Her Majesty’s Loyal Opposition, nor the people whose cause I am bringing to your attention, are oblivious to the fact that Barbados has a major solid waste disposal problem that must be tackled as an urgent priority. We know only too well the importance of the physical environment to our wellbeing and to our tourism-based economy. We are simply saying that this is not the right approach. Indeed, Barbadians are well aware of the acute economic crisis that confronts this nation.
When we urge you to rethink the Municipal Solid Waste Tax, whatever replacement measure we the taxpayers are called upon to shoulder must be equitable and proportionate. We have indicated that any sacrifices made by the population must be fair and shared. If it is based on the best expert advice, the widest airing of views and ideas and the fullest stakeholder consultation, it will merit national support. As presently constituted, it cannot.
On several occasions we have appealed to your Government to set up a mechanism which can take ideas from the best brains in the country, and which can enlist the help and support of all Barbadians in the economic recovery effort. Indeed, in December I recommended assembling a group of eminent persons to review the considerable fiscal and monetary challenges Barbados confronts. Since then, many others have called for it at different times by different names.
Barbadians recognize that we are all in this together, and that we all have an important part to play in making Barbados strong again. Thus far we have been ignored.
In this the 375th anniversary of our Parliament, at a time when the need to modernize and strengthen our structures of democratic governance is readily acknowledged by both sides, I urge you, at the very least, to use the mechanism of a Joint Committee of Parliament. This committee would take the views and evidence from the relevant advisers, experts, stakeholders and interested parties so as to build a national consensus on the adjustment which the Government must undertake to effect stability and thereafter the conditions for growth to return to our economy. Any solution to allow us to address the considerable expenditure incurred in the management of our solid waste would be addressed through this mechanism.
We recognize the urgent need for the collection of revenue for this purpose, but we believe that with goodwill and seriousness of purpose the Committee can conclude its work within three months, allowing time for implementation before the end of the year. Whatever the replacement measures that emerge from such a process, they must meet the test of good policy, sound legislation, fair and certain taxation and proper execution. Only then will they conform to the standard of good governance that Barbadians deservedly expect.
Government rests on the consent of the governed. We are all servants of the people. There are times in the affairs of a nation when we must pause and listen to the people. This is one such time. I urge you Prime Minister to listen to the people of this our land. Their cries are legitimate and their actions have not been rash.
Prime Minister, as a matter of courtesy, I am informing you that I shall be sharing the contents of this letter with the various groups and persons with whom we have consulted over the last six weeks, as is my duty.
I look forward not only to your response, but also to the opportunity for a formal engagement between ourselves is critical and will inspire confidence at a time when Barbadians are becoming more and more fearful for their future. This has not been part of our political tradition, but these are extraordinary times which require of us courage and extraordinary action.
There is simply too much at stake for our people.
Honourable Mia Amor Mottley, QC, MP
Leader, Her Majesty’s Loyal Opposition
Political Leader, Barbados Labour Party