Barbadians are not overtaxed, but it is likely that the wrong people are carrying the tax burden.
That was the argument put forward today by Minister of Housing and Lands Denis Kellman in recommending a revision of the tax system.
Speaking this morning during debate on an amendment to the Income Tax Act, Kellman insisted that while many would argue the country was overtaxed, he did not believe that was the case.
Instead, he said “the way we tend to tax” might have to be examined to guard against taxing the population to please “external forces”.
“We have to recognize that because of the technological changes we have to be very careful that we are not using our tax systems to support the external forces more so than the internal forces,” he said in his contribution to the amendment to allow for the waiver of all penalties and taxes for tax defaulters who have been allowed an amnesty between September 15, 2015 and February 15, 2017.
The Member of Parliament for St Lucy also warned that Government had to be careful that it did not impose taxes in a manner that would “interfere” with the productive sectors, including investors and workers.
He suggested that consumers should be the primary target of taxation, as part of a system that would ensure an “adequate supply of taxes” rather than having a situation where less money was going into Government’s coffers.
“We have to ask ourselves if over the years our tax systems as we knew them, if they are still working the way we want them [to], or whether we want to restructure them to appreciate what is happening. I am saying that if the consumption aspect is growing then we need to focus more on the consumption aspect of the economy and not ignore the effect it might be having on the productive side of the economy, because it is no doubt you need the workers and you need the investors.
“You have workers, you have investors and you have consumers; you have to ask yourself where the incidence of taxation should come. Everybody knows that the workers and the investors are the ones to propel the economy. It is the consumers that will be using the foreign exchange and they will be using it against the county, but an investor and a worker should not be seen as a person working against the country,” Kellman said.