DLP suggests parliamentarians pay pandemic tax at a higher rate

Parliamentarians should have to give up four per cent of their salaries as some Barbadians prepare to pay the one per cent Pandemic Contribution Levy announced in Monday’s national budget, the Democratic Labour Party (DLP) has challenged.

“It’s the only right thing to do,” declared the DLP’s third vice president Ryan Walters as he delivered the party’s response to the 2022/2023 Financial and Economic Statement at a virtual forum on Tuesday evening.

Prime Minister Mia Mottley announced that effective April 1, workers earning more than $6 250 monthly or $75 000 annually will pay the tax at a rate of one per cent of their income, for one year.

In addition, companies in the telecommunications and commercial banking sectors, the retail sale of petroleum products and general and life insurance, with a net income above $5 million in 2020 and 2021, will also have to pay the levy at 15 per cent of their net income from July.

The Pandemic Contribution Levy is projected to earn $120 million.

In the more than hour-long assessment Walters, who described the new tax as “a step backwards”, argued that it was “a definite flaw in how this Government is planning to deal with the current issues of the day”.

“We could have earned that revenue someplace else. So we have another income tax on these people who have their livelihoods too. You can’t say because a man earns ‘X’ amount of money that you can afford one per cent.  Well, let the MPs take out four per cent of their salaries because that is the only right thing to do.

“If somebody is earning $6 250 a month and can pay one per cent, a senior minister and a Deputy Prime Minister can afford four  per cent,“ he said.

Walters further warned that businesses will pass on the 15 per cent levy to consumers and questioned whether Government had another reason for imposing the tax.

He said: “Is that a start to move up the corporation tax in anticipation of the global minimum tax rate? And what tha  will mean for us who have to patronise these businesses?”

The DLP official proceeded to chastise Government for other measures, including the cap on the Value Added Tax (VAT) that will see gas being retailed at $3.99 per litre and diesel at $3.32 per litre effective midnight Wednesday.

He argued that after reaping the sweets from consumers, the Government brought the measure to appease Barbadians, insisting that it should have tackled the excise tax on fuel rather than VAT.

“So the Government is on a money-making spree off of fuel. So that is why the Government will tinker with VAT. If they reduce the excise tax and have it on a sliding scale as prices increase internationally for oil, they can slide the price of the excise tax down commensurate with the increase so that the burden is shared equally across increases and when the price comes down as well,” Walters contended.

He urged the Mottley administration to be transparent because Barbadians still do not understand why they are paying the most for gas in this region, even with the new measure.

The DLP official also made a strong case for Government to review the fuel tax which replaced the road tax, as he pointed out that not only motorists but others were also buying fuel at the pumps.

“So the Government is earning substantial revenue because the net is spread above vehicular revenue, in terms of the road tax, so there is an opportunity to reduce the fuel tax so that everybody gets a fair share and the Government still collects the revenue,” he said.

The DLP gave a thumbs up to the renewable energy programme but, as Walters suggested, given the substantial investment in the sector Barbadians should be told what reductions in electricity bills to expect.

“So I am saying to the Government of Barbados that given the aggressive targets of 50 thousand rooftops of solar panels over the next five years, given the significant investment that we are seeing in renewable energy, we should be identifying clear goals to the people of Barbados on where we should be year after year, so that we get to understand what we can understand from the Light and Power Company when we open our bills,” Walters contended.

He also took the Government to task for capping the cost of freight at $7 350 per 20-foot container and $8,000 for a 40-foot container in what the administration said was a move to shield consumers from rising prices of goods.

The private sector has welcomed the move although it cautioned on Tuesday that prices may not drop as increases on the cost of imported items continues to rise.

Walters charged that Government has given businesses the power to control the cost of food yet again.

“They will use their discretion now to determine if they pass on, when they pass on, and how much they pass on. It is as simple as that. We want to know that the prices are coming downward or stabilising, because there is some level of responsibility and integrity at the corporate level that are passing down the savings through the policies of the Government to you, the consumers and the patrons of their businesses.”

He assured that the DLP would track the movement of prices to ensure that consumers benefit.
sandydeane@barbadostoday.bb