“Taxation without comprehension is as inimical to democracy as taxation without representation.”Lawrence A. Zelenak (U.S. Professor of Tax Law).
Barbadians have been feeling the bludgeoning of austerity over the past few years. Their further lambasting by the Freundel Stuart-led Democratic Labour Party (DLP) did not end with the recent harsh Financial and Budgetary Statement. Hurtfully, Barbadians must brace for the worst after July 1 when the roll-out of burdensome tax measures is to be implemented.
The increased taxation will push the already high cost of living through the roof. Sadly, the measures put to Barbadians by Minister of Finance Christopher Sinckler and supported almost entirely by DLP parliamentarians are inimical to democracy, the welfare of Bajans, and Barbados’ national development. Clearly, by announcing that from July 1 the rate for the National Social Responsibility Levy (NSRL) will move from two to 10 per cent is sure to exploit and rake in at least $218 million over nine months.
Additionally, the introduction of a broad-based commission on all sales of foreign currency at a rate of two per cent via all wire transfers, credit card transactions, and over the counter sale of foreign currencies will furtively compound matters for consumers. Local businesses and households must also provision for an increased excise tax on gasoline and diesel, on top of a five-fold increase in the NSRL while still attracting a 17.5 per cent Value Added Tax (VAT).
Barbadians know all too well the cumbersome impact of cumulative energy costs on the local labour and prices market, particularly after having endured years of uncertainty and volatility. In total, more than 540 million dollars are expected to be voraciously extracted from tottering taxpayers over the next nine months. Effectively, Stuart’s harsh policy measures and Sinckler’s punitive tax impositions will cause greater consternation across households and the private sector will likely have to cut jobs or bend to more underemployment.
President of the Barbados Chamber of Commerce and Industry (BCCI), Eddy Abed, warned that the potential for job losses has increased with Sinckler’s taxation journey despite the ‘restraint and maturity exhibited by the private sector’ in the last decade. Leader of the Opposition, Mia Mottley, correctly described Sinckler’s heartless grab for greater taxation as the “most vicious tax take” ever to be inflicted on Barbados since 1941.
Barbados Manufacturers Association (BMA) President, Jason Sambrano, lamented that “people will spend less, there will be less economic activity for businesses” and issues of competitiveness will become more pronounced than currently exist. Seemingly removed from Sinckler’s thought is that local and foreign firms, together with households, will paralyzingly suffer a compounded rise in the cost of doing business. Domestic consumers will face at least a 10 per cent and more likely a 15 per cent rise in inflation while writhing in an onerous cost of living.
The predicament for the nation is that Sinckler’s prescriptions will indisputably challenge the quality of life and standard of living in Barbados, while keeping at bay the international business sector and accompanying investments. If things were already painfully hard, they will become practically unbearable for the nation.
It should serve the Finance Minister and members of the governing elite to realize that a tax policy should ‘acquire a high legitimacy and broad acceptance’ among our citizens because such legitimacy ‘requires a general feeling’ that the implemented tax policy serves the people, ‘relative to their contribution’. There must be the admission that Sinckler’s policy choices are unconscionable.
The DLP continues to be extremely hostile and repugnant to the very people that its parliamentarians are supposed to represent. Untold burdens will realistically strangle Barbadian men, women, and children. Most citizens and residents are already reeling at the horrible decisions being made at a time when there ought to be a stimulation of economic growth. For instance, numerous persons sadly teared up last week after listening to a female caller to VOB’s popular call-in programme, Down to Brass Tacks.
Barbadians heard the wailing cries of a woman keen to get on with providing for herself and family, but finding herself up against the crass tax increases. Barbadians, having heard the woman’s wails for fairness, have taken to social media showing an empathy that seemingly eludes Minister Sinckler. These individuals firmly believe that over-taxation by the DLP administration has left them feeling outside of the loop and not being serviced in juxtaposition to their contributions and sacrifices.
To date, Barbadians have experienced rapid pauperization and seen many dreams flushed. Without preaching any ‘doomsday scenarios’, Sinckler often appears dismissive of his critics, indifferent to advice, and pompous even in circumstances where the results of his macroeconomic determinations produce increased pain and suffering for the masses.
Equally foreboding is the silence of Prime Minister Stuart. There has been widespread disenchantment with the many incredulous promises made by Stuart and his Cabinet. Having allowed several opportunities to slip through his grasp, Stuart is perceived to find solace, mainly in the classics, history and mythology but forgetting that Barbadians must daily face the real world.
The Prime Minister has belatedly commented that the July 1 implementation date for the brutal taxation was “deliberate” because he and his Cabinet “wanted to hear what people thought might be some of the challenges they were likely to face.” With all due respect, Stuart’s seeming contortion is as pathetic and reprehensible as the spineless acceptance of two outspoken Ministers critical of the very budget and taxation torture.
Regrettably, there is no hope or outlook for real progress under this cadre of DLP parliamentarians and Cabinet. Despite the tremendous sacrifices made by the Barbadian people for almost a decade of setbacks and shabby governance, the nation is still suffocating under Sinckler’s economic mess and Stuart’s lethargic leadership. The fact that Sinckler asserted that ‘this is a time for strong, determined and unflinching leadership’ does two things.
Firstly, by implication, it seems he is condemning Stuart for not being the type of leader capable of resuscitating the nation and political economy at this juncture. Secondly, his repeated statements on leadership, point toward recent and many failures (i.e. over the last nine years), recognizing that the status quo inclusive of his tragic prescriptions must be uprooted. Surely, Sinckler – like numerous Barbadians – is calling for a new mandate so that once again Barbados obtains a legitimate government that is expressly derived from the power of the people.
As Milton Friedman argues, “higher taxes never reduce the deficit; governments spend whatever they take in and then whatever they can get away with.” It is time for Barbadians to legally stop this DLP government. Everything is logical and right with the national call for immediate general elections.
(Dr George C. Brathwaite is a political consultant. Email: email@example.com)