President of the Barbados Consumer Research Organization Malcolm Gibbs-Taitt has come out strongly against the newly approved amendments to the Value Added Tax (VAT) Act, which will see Barbadian consumers paying a 22 per cent VAT on cell phone airtime services from January 1, 2016.
Yesterday, the Senate approved the measure, which was tabled in the House of Assembly on Tuesday by Minister of Finance Chris Sinckler.
However, arguing that Barbadians were already financially overburdened, Gibbs-Taitt called for the withdrawal of the new levy.
“I just feel that we are overtaxed in more ways than one . . . and I feel that the tax needs to be withdrawn. Quite frankly, it is outrageous,” he told Barbados TODAY.
The leading consumerist also took issue with Government’s explanation that the $14 million, which is expected to be raised from the measure annually, would be used to fund university scholarships. In fact, he said he was “somewhat disgusted by the thought that we can increase the cost of telephones to give an impression that this is somewhat to assist with the education of students”, given that, as far as he was aware, taxpayers were already footing the bill for that sector.
“Taxpayers . . . fund education at the primary, the secondary and the tertiary levels. I am not aware that any adjustments have been made to decrease this money, so to come and put an extra tax on consumers is somewhat scandalous to say the least.
“When you do this, you are having a second set of taxation to meet this need which I have always understood have always been met [and] I am not aware that we are collecting less taxes than before now, and, if we are, I would like to know why.
“Could it be that Government and the private sector together are laying off so many people that that might be the reason why we are not receiving the amount of taxation that is levied?” he added.
Equally opposed to the 4.5 per cent imposition on voice and other transmissions is communications analyst Hallam Hope. He explained that Government was going against the trend being set by “progressive countries” that sought to implement net neutrality rules requiring telecommunication companies to maintain services such as Skype and Whatsapp free of charges.
“The decision to tax cell phone usage, including data and messaging, is a backward step, particularly at a time when there should be considerable emphasis on the productive use of communications and entrepreneurial development of software and other content,” Hope told Barbados TODAY.
He warned that the tax would impact communications, as well as have negative social and business implications.
“Individuals with limited incomes would now be forced to reduce their calling, turn more to Wi-Fi and even cutback on other services,” Hope said, while pointing out that communication was also vital to businesses, such as those in sales and in services.
“There are other approaches Government could have pursued rather than a tax on communication which runs contrary to the development of a viable communications sector and for some countries, contrary the rights of the citizen to communicate.”
Gibbs-Taitt is also of the view that consumers should cut back on the services to avoid paying the tax.
“The only way I know that a consumer can react to a matter such as this really is to mitigate the amount of calls whether it be voice or data,” he said.
The consumer rights advocate also suggested that consumers use their landlines more than they use their cell phones.
In the meantime, average Barbadians have been expressing mixed views on the new 22 per cent tax.
Many were resigned to the position that though the tax will affect them, they may have no choice but to accept it.
“. . . the majority will feel it. Four per cent is a lot,” said Steve Williams, who was one of the persons polled informally by Barbados TODAY in The City this morning.
Putting blame squarely on the shoulders of the Minister of Finance, he asked: “How could he [Sinckler] could do something like that?
“If you don’t know how to do something ask a question [but] don’t just keep putting tax all over the place killing the poor man.
“People use cell phones for everything these days, even to conduct business.
“This is his last two years in office, he should not be doing things to make people hate him, not at this point. Just do better, and this is not the way,” Williams added.
Diana Yearwood echoed William’s sentiments saying that the Minister of Finance should not be making citizens pay for the use of their own phone.
“I don’t think you should put tax on a cell phone. I guess people won’t use their phones as much now. I would use it as little as possible. That’s about it,” Yearwood said.
Others agreed that they would now find alternate ways to use their phones.
“That cell phone tax is bare foolishness. It won’t really affect me though, because as of now I done buying Top Ups. [I’m] using bare Wi-Fi now. Gotta get around it a smart way,” Enrico Knight said.
Princess Welch agreed and said, “It won’t really bother me because I have Wi-Fi [at] home and I would use that”, while Jalisa Mayers, whose mother pays for her cell phone services, said “I don’t think the tax should be implemented.”
Raymond Hope said while it may be tough to pay the tax, Barbadians will just accept it and move on.
“I don’t really have a problem with it. I hardly use data anyway. But you have to tax something though, so I guess that is his [Sinckler’s] way. As with Bajans, they are going to scream, cuss, curse for now and after a few weeks its normal again,” Hope added.
Patrick Clarke believes however that the tax could be of benefit to the country.
“It will bring in more revenue. I don’t have a difficulty with it. If you don’t want to pay it, just use your phone less,” he suggested.