Minister of Finance Chris Sinckler says despite “all the noise and chatter” he is yet to hear any credible alternative to Government’s much maligned fiscal consolidation programme.
Addressing the opening of 37th Commonwealth Association of Tax Administration (CATA) annual conference Monday morning, Sinckler also warned critics of the Freundel Stuart administration that it was not enough to simply cry down Government’s attempts at tax reform.
“I am aware that recent conversations in the media and elsewhere have centred around the ‘discovery’ in the International Monetary Fund’s Article 1V Consultation Report that over the past few years Barbados’ economy has lost as much $200 million in tax revenue from the operations of the international business and financial services sector,” said Sinckler, while suggesting that this was far from a surprise.
In fact, he harked back to his 2014 Budget presentation, saying even then he was at pains to point out to Barbadians that as a result of the 2008 fallout from the global financial crisis, Barbados had suffered a substantial loss of more than $1 billion in tax revenues due to major adjustments to Canadian domestic financial legislation.
“ . . . So that when we engage in a discourse about debt and deficit, revenue and expenditure, we need to do so from an informed perspective where we come into contact with the sobering reality that for a small, resource constrained and highly vulnerable economy such as ours, adjusting to such a massive loss of revenue capacity will neither be easy or quick,” Sinckler said.
He further suggested that it was unsatisfactory for critics to say; “I don’t like this or I don’t like that, or this is not working or that will not work, if at the same time you cannot proffer a comprehensive, logical and credible alternative”.
The Minister of Finance said the truth of the matter was that Barbados was in a far better position than it was two years ago in terms of safeguarding its tax earnings, as he credited the work of the Barbados Revenue Authority (BRA), which was formally established in 2014 as this island’s umbrella revenue collection agency.
“Indeed, already by way of simple measurement, I believe the presence of the BRA has added more than an additional one per cent of GDP [Gross Domestic Product] in value to the economy in its first year of operation alone,” said Sinckler. He said he was happy that significant progress was being made in the “reconstruction” of the national tax administration platform in relation to operational efficiency, tax policy and practice integration, internal workflow mechanisms, as well as “more concerted leadership on tax transparency and compliance”.
“We still no doubt have much more work to do including to conclude the question of the integration of Customs into the Revenue Authority and codifying and operationalizing the single tax payer IT system. But I am extremely confident that the BRA will deliver many decades of excellent and proficient service to the people of Barbados,” he added.
The five-day event, which is taking place at the Barbados Hilton Resort, brings together over 140 tax advisors and administrators from Commonwealth international agencies and members of the business community under the theme Enhancing Tax Compliance Through Strategic Alliances.
The conference is focusing on issues surrounding tax compliance, enforcement and exchange of information.
Sinckler urged the tax administrators to take their role of “advising governments on the most efficient and equitable ways to devise, impose and collect national tax revenue” as absolutely critical, suggesting that once done under the right circumstances, it could assist in making the attainment of national economic and social objectives that much easier.