Business
Barbados should raise taxes – IMF
The International Monetary Fund (IMF) has suggested that the government of Barbados should raise more money from tax in reviewing its medium-term fiscal strategy, aimed at eliminating the country’s deficit by the fiscal year 2014/2015.
In its report, the IMF has recommended a number of revenue-enhancing and expenditure-reducing measures to consolidate fiscal imbalances and reduce debt levels. On the revenue side, the mission suggested a permanent increase in value added tax (VAT) by 3 percent to 18 percent combined with the broadening of the tax base, elimination of exemptions and improvements in tax administration.
The Stuart administration had implemented some of the recommendations previously advocated by the IMF in temporarily increasing the VAT rate from 15 percent to 17.5 percent for a period of 18 months.
Other measures previously implemented include an increase to the excise tax on gasoline, by 50 percent, and the elimination of some tax-free allowances for travel and entertainment.
