More taxes likely – Dr Alleyne

By Jenique Belgrave

Barbadians are being warned to expect a possible increase in taxes as Prime Minister Mia Mottley presents the 2023-2024 Budget to the country on Tuesday.

Noting that the government had just increased its expenditure by increasing public sector salaries by six per cent, economist Dr. Antonio Alleyne said either taxes will be maintained at their current levels or adjusted slightly upwards for the financial year.

Speaking to Barbados TODAY ahead of the budget presentation, he stated “I do think you will see some sort of tax adjustment probably upward as opposed to anything else.”

In addition, he said taxpayers should expect an extension to the Pandemic Contribution Levy, which is set to end on March 31.

“Government will probably ask for a little more time to have that stay in place so it can collect from that,” he said, noting that Barbadians must understand that the island still has to repay all of its debts that were a part of the 2018 restructuring programme.

“The debt is still there and has never gone anywhere. Furthermore, because of the impact of COVID, we know that the debt has risen back to the 2017/18 period,” the lecturer at the Cave Hill Campus of the University of the West Indies contended.

Noting that there were projections for inflation to continue to increase worldwide, he pointed out that unless Barbados’ economy improves during the year, the cost of living will increase. He also pointed to upcoming deadlines on the reduction of VAT on electricity bills and the social compact with retailers and distributors.

“These things will come on stream before the end of the year and the government has plans to see these adjusted and to be honest, become more of an expense, so if that is the case, we know that cost of living will go up if things do not improve by the end of the year.

“Government will try to seek to maintain the position it has now for a period of time and it will give a cap as to how long these things will last. I am foreseeing that some type of tax adjustment will come, hopefully for the better, but more than likely for the worse because in giving a salary increase, the Government is not in a position to offer too much ease. The position will be to continue to hold strain in recognising that the economy is not as bountiful,” he said.

He stated that the current administration may seek to give more to the private sector to ensure businesses live up to their social corporate responsibility.

In addition, Dr Alleyne predicted that the administration will “delve down deep” into investment ventures with foreign company partnerships and seek to expand its capital works programme.

Saying the island’s economy needed to be diversified, the economist was quick to admit that this would take some time to happen, but insisted that it is necessary going forward to help drive the economy.

Alleyne stressed that this is especially critical as it was forecast that the island’s “bread and butter” sector tourism will not fully recover until 2025.

“We need to ensure that tourism doesn’t just improve but expand beyond the numbers seen in the pre-COVID years, because with reduced demand, there will be an increase in prices. He added, with Barbados’ tourism product already going up in cost, this would be challenging for some of the less financially buoyant individuals to come here and it will take even more time for those numbers to come back,” he added. 

jeniquebelgrave@barbadostoday.bb