Self-employed Barbadians are being urged not to “play around with numbers” now they are being called upon to contribute to the country’s economic recovery through payment of a Pandemic Contribution Levy.
Minister in the Ministry of Finance Ryan Straughn made the appeal in the House of Assembly on Tuesday morning as he introduced the Pandemic Contribution Levy Bill, 2022 which paves the way for the introduction of the tax, announced by Prime Minister Mia Mottley in her Budget statement in March this year to mitigate the adverse economic effects of the COVID-19 pandemic.
“I appeal to all self-employed persons to be honourable and do the right thing with respect to the application of this levy, because this is not the time for persons to be playing around with numbers,” he said.
Self-employed individuals with an income of $75 000 or more for the April 1, 2022 to March 31, 2023 period, will be required to pay one per cent of that income in a Pandemic Contribution Levy. An employed individual who has an income of $6 250 monthly, during the same period, is subject to the levy at the same rate.
While the payment for individuals will be deducted monthly, the levy will be due for self-employed persons on or before March 31, 2023.
Straughn reminded self-employed persons that in May 2020, at the height of the COVID-19 pandemic when lockdowns were in place and their operations were on pause, the Government provided a one-time business interruption benefit to assist them.
“Therefore, I say to all self-employed persons, particularly those who benefitted from the business interruption benefit, that this is not the time to play with the numbers, because when we were all at our most vulnerable, the taxpayers and the Government of this country made sure that there was some relief for you then,” he said.
“This is a small contribution now with respect to the one per cent for the self-employed person, just to give back a little piece.”
Under the legislation, a self-employed person who fails to pay the levy or pays it after the date specified will be subject to a $500 penalty payable to the Barbados Revenue Authority (BRA) for each breach, in addition to interest of one per cent for each month it is not paid.
The levy is also payable by a telecommunications company, a life and general insurance company, an entity engaged in the sale of fuel, or a commercial bank that had a net income of $5 million or more in either the financial year ended in 2020 or 2021, or both, at a rate of 15 per cent of the net income of that company, payable in four installments for each year.
The legislation makes provisions for BRA to determine the amount of levy payable by self-employed persons and companies, including a requirement that they keep accounts and records, and provisions made for the Authority to carry out assessments, reassessments and audits.
Straughn said the Pandemic Contribution Levy will help Government finance its way through this fiscal year.
“Which is why it is one-off. We are sufficiently comfortable that once growth returns to the economy, the current tax structure as articulated is sufficient to take us forward,” he told the House.
The Minister used the opportunity to express gratitude to those Barbadian individuals and companies who donated to the Government’s Adopt-a-Family programme that saw at-risk families getting 12 months of support to help them through the financial difficulties triggered by the COVID-19 pandemic.
He told the House of Assembly that between March 2020 when the programme started and April this year, 771 persons had made monetary donations to the tune of almost $4.8 million.
Straughn said their contributions, and those of others in the private sector, churches, trusts, and clubs, had eased the burden on Government.
“Without that support, I can’t tell you where Barbados would have been in the last two years,” he said.
The Pandemic Contribution Levy Act, 2022 was passed at the end of Tuesday’s sitting. (DP)