Government’s two per cent tax on foreign exchange transactions is about to cost seniors dearly, says President of the Barbados Association of Retired Persons (BARP) Edward Bushell.
He is therefore calling on Minister of Finance Chris Sinckler to exempt pensioners from the contentious tax announced on May 30 as part of a $542 million austerity package.
The tax, which is due to be implemented in two phases beginning next Monday, will be applied to cash, bank drafts and wire transfers, with credit, debit and travel cards due to be subjected to the fee on September 1.
In his recent Budget, Sinckler also announced an increase in taxes on fuels as well as a hike in the National Social Responsibility Levy (NSRL) from two per cent to ten per cent, which took effect from July 1.
However, by memo dated July 11, the Permanent Secretary in the Ministry of Finance has since informed that a waiver of the NSRL has been granted “on drugs imported, purchased out of a bonded warehouse or purchased locally and issued by the Barbados Drug Service with effect from July 1, 2017”.
Bushell said this welcomed news for seniors who “need the drugs most”.
However, he told Barbados TODAY he was concerned that pensioners would still be subjected to the foreign exchange tax, as well as the increase in fuel prices.
“The members are concerned on the broad application [of the tax measures]. Of course it affects them, especially because they are on fixed income and this tax hits [almost] everything. I mean gasoline to get to the doctor, it is going to affect every item with the manufacturers and everybody saying how much it is going to affect them. It is going to affect them very, very seriously. It [the NSRL] is going up by 400 per cent, come on give me a break,” the BARP president explained.
He argued that the two per cent levy on foreign exchange would make life more difficult for members of the 40,000 strong association who had to travel overseas for medical attention.
He explained that while they would prefer to have all their medical procedures done locally it was not always possible.
“Those persons who will have to go overseas for medical help, that two per cent is going to carry up their medical fees and put it out of reach for some people. So now not only you have to pay your cost, but an additional two per cent when you are buying foreign exchange currency to go and get medical help. So that is something that should be exempt as well,” said Bushell.
He told Barbados TODAY the association’s consumer committee would monitor price increases caused by the tax measures and what impact it was having on members.