Politics
Barbados opposition leader, Mia Mottley, says more hardship ahead as new taxes announced
The Finance Minister said that no one expected the scale of the financial crisis which arose from the financial crisis which gripped the world in 2008. “We know that business cycles go up and business cycles come down and that it was inevitable that we would have a global recession, because that is part of the nature of business cycle.”
“However, nobody expected the financial crisis would have been so devastating to economies across the world and particularly to our major trading partners. We did not expect it. We never expected that it would have lasted this long and drag on. The Governor of the Central Bank was saying that we should have been repositing ourselves. That is the real issue,” Sinckler said.
He said the government continues to have a problem with a shortfall in revenue, particularly with respect to personal and corporate taxes. “The situation is a major worry to the Government especially as it relates to the contribution of the International Business and Financial Services sector,” said Sinckler, noting that because the retrenchment process in the public sector had not been totally completed at the time of the preparation of the Estimates, they could not be fully reflected in the document.
But he said that would be done and once the process is completed along with the reforms of 19 state institutions, government will realise additional savings of about BDS$40 million by the end of 2014-2015. “It means therefore we will be left with a shortfall of BDS$105 million to get to our target,” he said, adding “in accounting to get to our desired target it will be necessary for Government to make additional adjustments of $145 million,” he said.
The Finance Minister said in order to close the BDS$105 million loophole, the tax applied to Bank Assets will be extended to all financial institutions effective April 1, 2014 and is expected to raise an additional six million dollars.
Sinckler acknowledged that there would be an “immediate impact on motorists” as a result of the new tax, adding also the government expects the Barbados National Oil Company (BNOC), “to remit …both the 2013 and 2014 dividend to the Government which will account for BDS$24 million in additional revenue coming into the Government account.
Sinckler said the sale of the Barbados National Terminals Limited would realize at least BDS$70 million. “Of these two revenue measures Government expects a minimum of $123 million to come into the Consolidated fund by March 2015,” he said.
