An Independent Senator is commending Government for requiring local businesses to pay the same low rate of corporation taxes as international businesses.
Senator Althea Wiggins said today it was a bold move on the part of the Barbados Labour Party (BLP) administration to abolish the 30 per cent tax previously paid by Barbadian firms and putting them in the same category as offshore companies which paid 5.5 per cent.
“I really want to congratulate the Government on this bold move for the changes in the international business sector. I have had several meetings with persons in the international business sector before and now; and I recognize that there were many changes that they wanted to come about.
“One of the things I really have to say in relation to most of the Bills that are coming before the House now for changes, for repeals, is because Barbados is in a situation where you have to change with the changing times and what is happening in the international community,” Wiggins said in her contribution to the debate on the International Companies (Repeal) Bill 2018.
She noted that Barbados has been under severe attack for many years because of the preferential tax regime that was created in the international business sector to benefit employment and earn foreign exchange.
She echoed earlier sentiments by Opposition Senator Crystal Drakes that the powerful economies do not want to see small nations like Barbados succeed or develop. “They would like to see us go under,” she added.
“So this preferential tax structure was regarded by the OECD [Organization for Economic Cooperation and Development] and the EU [European Union] as ring-fence; and granting concessions that were not available to local businesses to lure foreign investors away from their country to our country which would help develop our countries,” the Independent Senator argued.
She said Barbados was therefore given substantial foreign exchange credit and in some cases these international business companies did not hold foreign currency accounts in commercial banks here.
As a result, Wiggins contended that Barbados needed stronger reinforcement legislation to institute these tax measures in order to force international business companies to be compliant.
The senator recalled telling OECD officials last year during a meeting that whenever they set targets for Barbados to reach, they kept moving the goal posts as soon as they are about to be reached.
“So the services providers in Barbados were at the meeting that I went to two weeks ago. They are asking for the feature of the legislation to address delinquencies firmly, so that when these [international companies] become delinquent they can be advised and the book can be thrown at them, literally, because a lot of them have become complacent and some of them think that the country is so dependent on them that they don’t have to be compliant,” Wiggins stressed.
Consequently, she thinks this new legislation would police them a lot better.