More taxes looming, warns Stephen

A local economist is predicting that Barbadians could face an even greater tax burden as a result of the rejection by the Fair Trading Commission (FTC) of the bid by the Sol Group to purchase the Barbados National Terminal Co Limited (BNTCL), owned by the Barbados National Oil Co Limited.

Jeremy Stephen yesterday argued that because Government was relying on the US$100 million sale to shore up the country’s dwindling foreign reserves, the FTC’s decision meant the Freundel Stuart administration would likely be forced to find the revenue from alternative sources.

“I wouldn’t be surprised if there is another emergency measure or tax measure that comes out of the woodwork because of this. I wouldn’t be surprised, but I hope I am wrong. But given the situation something has to be done and it’s a case of whether it would come in the form of expenditure cuts, slowing down expenditure in order to conserve cash or if it would come in the form of revenue in the form of a new tax. “Normally we don’t have it happen where a tax is introduced outside of a Budget but the Minister of Finance [Chris Sinckler] could make such an intervention in Parliament,” Stephen told Barbados TODAY in an interview, adding that there was “a lot of uncertainty surrounding this even now that it has happened”.

In addition, Stephen explained that the situation was compounded by Britain’s impending separation from the European Union, saying it did not augur well for the country’s hopes of stabilizing the foreign reserves through a bumper winter tourist season.

“The fact that we don’t know how long before Sol would have the means to return to the FTC with a new proposal [and] . . . given the uncertainty as pointed out by the IMF [International Monetary Fund] as it relates to the impact of Brexit on our tourism product in 18 months time, as it stands now we should really brace ourselves for any lapse of the pound, and therefore the average tourism spend could very well fall this winter,” he said.

The economist also contended that along with concerns over the foreign reserves, which have fallen well below the recommended benchmark of 13 weeks of import cover, Barbadians must now brace themselves for the possibility of even more economic downgrades.

“I have already factored in a downgrade already for this year. Standard & Poor’s have been keeping the outlook negative so there is a real likelihood that there could be another downgrade later this year as this issue with the FTC stretches towards December, as well as the expected slowdown of the economy. The IMF has to revisit our economy in October so their current outlook is only worth its salt for the next three month,” Stephen contended.

The IMF has already warned that growth in 2017 is projected to slow to less than one per cent, reflecting the fiscal consolidation efforts introduced in the Budget presented by Sinckler on May 30.

The minister had said in his presentation that the administration was still banking on the BNTCL deal to go through as it seeks to erase a $537.6 million fiscal shortfall before the next general election.

However, he had also announced the proposed sale of the Hilton Barbados Resort, also for US$100 million.

16 Responses to More taxes looming, warns Stephen

  1. Cherylann Bourne-Hayes
    Cherylann Bourne-Hayes July 4, 2017 at 11:57 pm

    What the heck is left to be taxed?

    Reply
  2. Sherry-ann Mayers
    Sherry-ann Mayers July 5, 2017 at 12:05 am

    Probably taxing the air

    Reply
  3. Sonjeine Corbin
    Sonjeine Corbin July 5, 2017 at 12:32 am

    Oh lord now! !!!

    Reply
  4. Ali Baba
    Ali Baba July 5, 2017 at 1:02 am

    GOVERNMENT RAKING IN 22 BILLION $ 9 YEARS IN TAXES, WHA THAT IS 2, 444, 444, 444.44 PER YEAR IN TAXES AND STILL THE COUNTRY WORSE OFF. THIS IS SCANDALOUS AND NEEDS INVESTIGATING. IN MY OPINION THIS IS CATACLYSMIC ERUPTION, PLUNDERING OF TAXPAYERS MONEY. NO WONDER, NO WONDER WE STILL IN THE DOL DRUMS, HUMMMMMMMM, GOD HELP US

    Reply
    • Epaphras D. Williams
      Epaphras D. Williams July 5, 2017 at 5:22 am

      The government has found a convenient cash crop growing in the people’s purses and accounts. Are they gonna look for work if they can strip the silent majority?

      Reply
  5. Nicholas Bott
    Nicholas Bott July 5, 2017 at 1:09 am

    What’s left to tax, sea water?

    Reply
  6. Pullhead Davis
    Pullhead Davis July 5, 2017 at 1:12 am

    You carrying a joke too far more taxes at this rate government going taking home more money out our pay than whats left for us to spend with no raises mr stephens i hope with capital letters you are wrong about more taxes

    Reply
  7. Sherwin Patterson
    Sherwin Patterson July 5, 2017 at 3:35 am

    What are they going to tax now?Our asses?Man these people outta hand.

    Reply
  8. Angela Howard-Graham
    Angela Howard-Graham July 5, 2017 at 4:44 am

    Lord help us all,

    Reply
  9. Safiya Kamaria Kinshasa
    Safiya Kamaria Kinshasa July 5, 2017 at 5:17 am

    Makes sense… I mean it takes a lot of money to run those grand hotels… I mean the money isn’t going on the roads right? Also deforestation has ruined the environment so all those suburban American looking properties gotta be sustained too.

    Reply
  10. Epaphras D. Williams
    Epaphras D. Williams July 5, 2017 at 5:43 am

    The current administration has made Barbados rather unattractive to foreign investors. They can’t find ways to generate revenue other than tax and retrench. The BLP has me though. Their silence in my opinion is partner to this treachery. If they are returned to power, it will again be by default. They like all opposition parties here (and notice the trend) have never won the race on performance alone, they win because the nation became disenchanted with the practices of the government and Bajans like it so.

    Reply
  11. Wendell Kirton
    Wendell Kirton July 5, 2017 at 8:01 am

    When we closed down Barbados now

    Reply
  12. Ashley Griffith
    Ashley Griffith July 5, 2017 at 10:08 am

    Well somebody come and pick me up *singing*

    Reply
  13. Keith Forde
    Keith Forde July 5, 2017 at 11:05 am

    HOW HE KNOW THAT.

    Reply
  14. Lee Farnum-Badley July 5, 2017 at 1:17 pm

    Barbados will have to devalue sooner or later. It will be better “sooner” than later because the economic recovery will be quicker. Our competitiveness is being steadily eroded by our stubborn adherence to an absurd pegged relationship with a US dollar that is grotesquely overvalued. Currency adjustment will certainly be one of the IMF prescriptions to help reduce our demand for US dollar-denominated imports. Once the economy starts rescuing the tourist spend (with our more reasonable factor prices) employment growth and profits will revive, and concomitantly the government’s re-established revenue levels will address the public debt.

    Reply
  15. Arthur Collymore
    Arthur Collymore July 5, 2017 at 3:21 pm

    The proceeds from this sale, when added to the present stock of reserves, would still be below the 12 weeks of Fex cover. In seeking to close the deficit, this DLP admin in fiscal yr 2017-18 increased both expenditure & revenue. This madness is compounded by DEM unwillingness to cut expenditure because of not wanting to be unpopular. I don’t predict more taxes but expenditure cuts. If DEM weren’t so busy playing politics with the issues, the right mix of policies would have long been implemented.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *