Two key business figures and one of the Mia Mottley administration’s leading critics are hoping that a strategy for growing the economy and lowering personal income taxes will come from the Prime Minister’s maiden Budget speech tomorrow.
In an interview with Barbados TODAY, the head of the Barbados Private Sector Association, Edward Clarke, said growth was now a critical priority for the administration, which has been focussed on austerity measures almost ten months into its term of office.
He also said while there were several issues which needed to be addressed, it was important for the Prime Minister to deliver a balanced Budget.
Clarke told Barbados TODAY: “We need to be sure that we balance this Budget to a primary surplus of six per cent as a country and it has to generate growth in the economy. The growth must be there. You cannot get that six per cent primary surplus by just getting revenue or taxation out of what is there currently.
“We need to generate growth as a country in the economy and we need to find ways to help do this. Hopefully the Prime Minister will give us some insight into some of the things that they are working on and I think that is certainly something that should be spoken about in the Budget [such as] longer term incentives for investments in the economy.
“It’s a tough job. You have a six per cent surplus so it’s not easy. You know what we went through to get a three per cent surplus this year . . . but to get another three per cent you’re talking about another $300 million out of the Budget.”
The BPSA chairman said that even as Government eyes generating more revenue, he expected a shifting of the personal income tax rate to closer to the low corporation tax rate that was set in December. At the same time he appeared to support more indirect taxation to compensate for a projected revenue fall.
He called for Government to widen its tax net, claiming some individuals were still not paying adequate taxes.
Clarke added: “There are still too many people in Barbados not paying their fair share of taxes and I would expect that Government would try to collect more taxation through indirect tax means rather than direct tax means.”
He said Government needed to offer incentives to stimulate the approximately $10 billion of savings in the banks. He also called for an ease for individuals saving for long-term retirement, particularly pensions.
But suggesting the Budget speech was mere political theatre, the leader of the Democratic Labour Party (DLP) Verla Depeiza sought to put emphasis on issues beyond the economy, as she called on Prime Minister Mottley to address concerns about crime.
She said Barbadians needed to be reassured at what she considered to be a crucial juncture.
Depeiza told Barbados TODAY: “The reality is that the Budget is pure optics in the lives of most people. It is not going to address the difficulties that they are feeling in their lives, unless we hear that the police are getting a significant increase, [as] we didn’t see that in the Estimates.
The DLP leader said: “ I don’t know what the new plans are and Barbadians, I think, want to hear what those plans are to counteract the crime that we are feeling in our homes. The perception and the fear are real. Those are the issues that Barbadians really want to hear the Prime Minister on.”
But on what might come from the Prime Minister’s proposals, she said she would also like to see income tax rates lowered and for more details to be revealed related to the consultancy fees being paid to White Oak, the firm that has been negotiating on Barbados’ sovereign debt with creditors.
President of the Small Business Association (SBA) Wayne Willock told Barbados TODAY that he would be paying rapt attention to the fiscal measures.
He said he was hoping for measures that will provide some ease and put more disposable income back into the hands of consumers and small businesses.
Willock said his members could also significantly benefit from lower water rates.
The SBA president said: “There seems to be a big anomaly between corporate and private water rates which really needs some adjustments, so I am looking to hear if they will be any adjustments in that area.”
Furthermore, he’s hoping that the Mia Mottley administration will delay the introduction of VAT on online purchases, until the scheme is “properly manageable”.
Willock said: “I know it is something that may have to happen because the country is losing about $12 million in VAT because of not being able to track the VAT online. It has to be well managed.”
The SBA leader also urged Government to pay VAT and personal tax refunds by the end of 2019.