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Professor Moore: Income tax too high

A former senior economist at the Central Bank of Barbados is warning that the country’s high personal income tax rates are impacting people’s ability to invest in areas such as education, housing and business.

Therefore, Professor Winston Moore is recommended the reintroduction of some of the measures introduced in the 1970s and 1980s that gave taxpayers an ease.

The senior lecturer in economics at the University of the West Indies (UWI) Cave Hill Campus explained that although income tax rates were high during the island’s early post-Independence years – as high as 50 per cent of an individual’s salary – some allowances and other policies cushioned that blow.

“The policies that the Government used during that period of time were quite important. I think it is something we still can look at,” Moore suggested at the Henry Fraser Lecture Theatre as he delivered the inaugural professorial lecture under the theme In Plenty and In Time of Need: Barbados’ Economic Development Since Independence.

“So allowances for children studying at secondary schools . . . introduction of a slider scale for land tax, allowance for rent paid, allowance for mortgage interest, income tax allowances for savings in credit unions . . . All of these policies were aimed at increasing the disposable income of the middle class,” Moore said.

“So even though you had these high rates of tax you still try to ensure that your middle class had disposable income to invest . . . if they so desire.”

He contended that while there had not been many changes to the services provided by the state, including highly subsidized education and free health care, the tax structure had changed significantly.

“We’ve sort of seen the implications of that . . . in terms of the tax revenue and tax expenditure. But there is a fundamental issue in having such high rates of tax as well, because once you have such high rates of tax you really can’t invest in your children’s education, you really can’t invest in businesses,” Moore said.

In his June 15, 2015 presentation of the Financial Statement and Budgetary Proposals, Minister of Finance Chris Sinckler announced changes to the personal income tax structure, removing many allowances. At the same time, he announced a reduction in the 17.5 per cent income tax rate to 16 per cent and the higher rate of 35 per cent dropped to 33.5 per cent.  

5 Responses to Professor Moore: Income tax too high

  1. Sheldine Dyall
    Sheldine Dyall September 22, 2016 at 5:11 am

    We pay the highest taxes in the world. A pack of people that don’t know what going on DEMS.

  2. Hal Austin September 22, 2016 at 2:54 pm

    Income tax is not too high. The high earners should pay more direct and indirect taxes.

  3. jrsmith September 22, 2016 at 3:20 pm

    How could the government justify the tax levels which is introduce when they cannot efficiently collect taxes, when millions is owed , when certain people don’t pay or wouldn’t taxes , also when public departments hasn’t being audited for a decade or more , when the (AUDIT GENERAL’S ) report showed the tens of millions which is owed to the Barbados treasury..

    We have a non productive government with our politicians just displaying ignorance and corruption, our Barbados is becoming as like the countries on continental Africa..

    We cannot blame the (British ) any longer for our cock ups , on (Independence ) (Dependency) which has lasted since (1966) when we were proud to call our self (Independent) we had a very stable government and reasonable economy, look where the politicians have taken us, our people is stealing flowers from grave side and committing all types of crimes … (DODDS) is filling with our black young men…… they are the only ones who seems to be committing crime…..

  4. Loretta Griffith September 22, 2016 at 3:57 pm

    I agree our standard of living is very high when compared with some larger islands, but our taxation is definitely too high.
    I often wonder why would government keep imposing rather than focusing on collection? Our tax system needs to be properly policed.
    As I have said before we should stop imposing further taxes just for the sake of imposing and concentrate on collections.
    I am all for paying taxes but Peter should not be made to pay for Paul.

  5. Hal Austin September 24, 2016 at 2:56 pm

    Governments do not work. If people make big demands on government then they must raise the money some how. What we need is a higher property t ax and an inheritance tax. I see Hillary Clinton is now talking about an inheritance or death tax.
    Inheritance is the most common way of transferring wealth from generation to generation.


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