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Measures should have included a reduction in GSC – Stuart

by Marlon Madden
3 min read
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A cut in the Garbage and Sewage Contribution (GSC) levy for households should have been one of the measures announced by Prime Minister Mia Mottley on Thursday to help Barbadians better cope with the cost of living, says economist Kemar Stuart.

“In the recent address to the nation the Prime Minister missed the opportunity to address the Garbage and Sewage tax currently attached to the water bill of all Barbadians, both domestic households and commercial properties,” said Stuart.

“This tax has been a serious burden to Barbadians, especially those persons not connected to the sewage system,” he said.

After days of intense negotiation with members of the business community, Prime Minister Mia Mottley announced a major relief package on Thursday, placing an additional 44 food, household and personal items on the VAT-free list starting next Thursday for six months.

This will result in a price adjustment of mostly between 12 and 15 per cent on the qualifying items.

In addition, Mottley, who acknowledged that the measures were “not perfect”, announced that the VAT on electricity bills for residents will be lowered to 7.5 per cent up to the first 250 kWh, also for a six-month period.

Children will also be able to continue to access the School Meals programme from July 25 to September 2 this year.

Reacting to the development, Stuart said by not adjusting the onerous GSC levy, residents were still facing a major burden.

“The garbage and sewage tax relief for households should have been added to the prime minister’s recommendations for the cost of living in Barbados,” he insisted.

“The Garbage and Sewage tax is not only a financial burden, but a haven for potential corruption as the government of Barbados redirected tax collection reporting from the Consolidated Fund,” claims Stuart.

Introduced in June 2018 during Government’s austerity budget, the GSC was implemented in August of that year at a charge of $1.50 per day (discounted at 0.75 cents for pensioners), while commercial premises are paying 50 per cent of their existing water bills.

The revenues raised from this measure are going toward the funding of the Sanitation Services Authority (SSA) and the Barbados Water Authority (BWA).

Questioning the absence of public records on the performance of the tax to date, Stuart also questioned why the SSA and the BWA have not published up-to-date financial statements as required by the Public Finance Management Act.

He called on the Mia Mottley administration to provide a full report on how the GSC levy was contributing to the benefiting agencies.

“Under the new Public Finance Management Act, the Government of Barbados has the authority to sanction state-owned enterprises for noncompliance of financial reporting. Based on the Auditor General’s Report, the filing and publication of financial statements of both the Sanitation and the water authority are not available. This is in direct contravention of Barbados’ agreement with the IMF,” said Stuart.

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