Tax hit

Prices will rise by more than two per cent from new levy - Lorde

Not only will Barbadians be paying more for goods when the National Social Responsibility Levy takes effect on Thursday, they can also expect to see more than a two per cent hike in costs, University of the West Indies economist Dr Troy Lorde has cautioned.

“The two per cent tax of course will naturally filter down to consumers. It is not going to be absorbed by businesses. We’re talking about imports – food, appliances, consumables, it is going to be coming to the consumer,” he told Barbados TODAY in an interview.

The tax, which was announced by Minister of Finance Chris Sinckler as he delivered the 2016 Financial Statement and Budgetary Proposals earlier this month, is intended to offset the spiralling cost of health care and help the Sanitation Service Authority to restock its deteriorating fleet.

It is projected to raise an additional $142 million in Government revenue.

Lorde explained that like all taxes, the levy is compounded, so wholesalers and retailers have to apply a range of additional costs, including the Value Added Tax (VAT). As a result, he said consumers would have to dig even deeper into their pockets.

“So something that imports for a dollar, you can add the duty, you can add the VAT, you can add the two per cent levy . . . the final thing to the consumer will be certainly greater. By the time two per cent comes through in the final retail price it will be more than the two per cent increase. So whatever that calculation is, it could be four per cent, five per cent depending on the various mark ups by wholesalers and retailers.”

The economist said businesses had little choice but to pass on the costs to consumers, though he anticipated that some would try to maintain current prices for as long as possible.

“The sectors that sell to the public at this stage really have no wriggle room in their finances,” he said.

Lorde said while he accepted that Government was cash-strapped and needed to raise revenue, additional taxes were not the answer in an already over-taxed economy.

Moeover, he challenged the Freundel Stuart administration to ensure the tax is used for the intended purpose.

“If you raised $140 million in taxes and we are saying it should be used for health care, then all of it or most of it has to be used to fund health care,” Lorde said, insisting that Barbadians should get the commensurate services being funded by their taxes.

“Eventually we should reach a stage where we are no longer hearing that there are shortages at hospital or that you can’t fund this or that.

“If this is what the tax is intended to be used for, let it be used for that. Don’t use the money to plug other holes,” he advised.

8 Responses to Tax hit

  1. Smiley August 30, 2016 at 7:03 am

    Next election .I will not be tricked

  2. Kimberly August 30, 2016 at 7:47 am

    How much increase will his pay check be

  3. Ivana Cardinale August 30, 2016 at 8:52 am

    Well, definitely, the only thing this administration has done is to increase taxes, create new ones and increase goods prices, which means, increase poverty. Let me gice you the news DLP, you are NOT winning the next election. I’m not voting for a party that the only thing has done is to make us more poor.

  4. Phil August 30, 2016 at 8:53 am

    thinking by Minister Sinkler and his advisors. There are other avenues of revenue collection. All they have to do is think a little further and deeper. for example, institute the often thought of parking meters system. Not only in the city but in other towns and developing business areas like Belleville et al. Do the maths, they can haul in $ 50,000 to $80,000 dollars and that’s basic 10,000 vehicles times $1.00 times 10 hours. Hey that’s $100,000.
    times avg. 250 working days per year, equals $25 million. add to that 20% of all drug fines and traffic related fines. these will more than collect the revenue needed for health care costs. Minister Sinkler Please don’t do the “quick-fix thing. this method is causing you to be very disliked.

  5. Lily Bella August 30, 2016 at 11:56 am

    The people will have to pay of course…..when last the Ministers took a pay $$$$$ cut

  6. Just Visiting August 30, 2016 at 12:28 pm


    You have a good suggestion; however your specific example is not the best. The QEH in general will need adequate funds for years to come. If for some reason Bajans stop parking illegally; how do you get that “lost” revenue? Anyhow I don’t see the govt raising enough money from parking fines to fund the QEH but it will be a start.

    In reality, whatever revenue measures that are taken will be ineffective because we in Barbados got a “champagne mouth ginger ale pocket mentality.” That “poor black man” will emerge to counter or mitigate against any proposal taken. So we Bajans are very good viewers of progress and what should happen; we are not so keen on the doing to realize the progress; at least politically.

    I believe If you were to query the average Bajan about anything you will surely hear that “Government” needs to do more; or needs to get involved; or should do this or do that.

    How often do we recognize that by democratic principles we; the individual is actually part or the government itself.

    We the “government/individuals” often destroy govt property; don’t stop other from destroying “govt property” because we see the govt and governing as some other person’s issue. Man I just trying to make ends meet. So I gine pelt the plastic food container any and every where. I gine burn my bush and stuff. I aint got asthma so smoke don’t affect me. All of these selfish actions often have consequences for other person’s health; which we often deflect from taking the blame by say that govt should; really should; ought to; don’t; wont.

  7. Corey Broom August 30, 2016 at 1:55 pm

    Things that this government may consider.

    1. Invest in renewable energy, give grants to households, saving will be three fold than having to purchase oil.

    2. Why are government departments operating out of commercial buildings when government own several other building that can be use. Stop renting.

    3. Put back VAT at 15%, that means more disposal income for households in turn small business will start to strive because now persons have money to spend with them and further reducing the number of persons from depending on government social programs.

    4. Reduce the number of ministers.. (highly unlikely, but I still mention it)

    5. We can’t afford constituency counsels now,, done wid that.

    6. Reduce road tax, there are many on the road driving without it because they just can’t afford it. Maybe by reducing it persons can find the fewer coppers to pay.

    7. stop giving way so many concessions to outside investors, that’s like you robbing yourself.

    A stressful society is a sick society, and the cost of health care with continue to rise. so yes this 2% tax will make money but at the end of the day more people doing to be stress and more people going to be in need of health care. As I always hear “stress does kill”.

  8. Phil August 30, 2016 at 4:58 pm

    Justin, Thanks for your thoughtful response. You did not comment on the 20% of court fines and bail deposits on drug dealers and and smugglers. do you know that there are over 180,000 vehicles on the roads in Barbados? People will HAVE TO PARK somewhere. Institute c car washer operation fee similar to the red caps system Those guys make serious money like coconut vendors. Just imagine one car washer washing an average 50 vehicles at $10.00 per vehicle per day times six days per week and most of them wash on Sundays too. That’s $600.00 per week, times 52 (weeks per year) and they don’t pay NIS. Then we’ve got the unregistered self employed professionals, the carpenters, the masons, the plumbers , the electricians, and quite a few more who don’t pay NIS but will draw down on n non contributary pension and get free hospital bebefits when they get hurt or when they retire. I pointed out a plan showing here the QEH can earn over $ 10 million annually to help subsidize its supplies expenses. I sent it to Senator Carol Lady Haynes, Dr. Jacobs. Her response was very positive and urged me to send on th the CEO of the QEH Dr. Dexter James. I did and to this day I have not received even an acknowledgement of having received my correspondence. And there you go Justin and Corey, the QEH are still depending on Philanthropists to make annual contributions. People like Rihanna, and Joe Kidd who stages the Holder’s Season, Sir Cliff Richards and Sir Andrew Lloyd Webber who stage the Broadway To Barbados show, Plus many other kind and thoughtful individuals. But no they the EH admin want it free or so it seems. I can gladly send you my idea electronically If you tell me where to send it.


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