Revenue loss partly to blame for new taxes

Revenue loss from the once lucrative international business and financial services sector is being partially blamed for the introduction of new taxes.

Delivering a presentation to the Social Partnership on Friday, Acting Governor of the Central Bank Cleviston Haynes said Government’s revenue continued to be challenged due to considerably lower corporation taxes being collected mainly as a result of revenue loss from the international business sector.

“That in a sense is one of the reasons that is driving the imposition of new taxes in order to close a gap that is created by the loss of revenue on the international business and financial services sector,” said Haynes.

“That is an adjustment that one has to look at. Ideally, you want to see that contribution from international business and financial services sector improve because it not only impacts your revenue but it also impacts your international reserves,” he added.

During his May 30 Budget presentation, Minister of Finance Chris Sinckler announced the introduction of a new two per cent tax on all foreign exchange transactions, an increase in the controversial National Social Responsibility Levy as well as an increase in excise on fuels – all part of revenue raising measures.

It was estimated that the sector contributed about $180.2 million in corporation taxes and an overall $874 million or 10.3 per cent of Gross Domestic Product to the Barbados economy for 2012, the last year data was readily available.

There were about 4,000 active international businesses registered up to 2015.

Data up to July 2016 indicated a 7.5 per cent drop in the number of licences granted to international business companies.

Haynes said the sector was facing significant challenges especially as a result of various changes and initiatives being implemented in the international arena.

“The sector has done really well for Barbados in the past, but at present we are not getting as much revenue or foreign exchange from the sector as we did in the past because of some of the initiatives,” said Haynes.

“What that has meant is that some of our offshore companies have left the jurisdiction,” said Haynes.

He gave the assurance that the Ministry of International Business was working diligently to find solutions and to grow the sector.

He said it would be very bad for Barbados to lose the international business sector, adding that apart from the foreign exchange and taxation, the sector was responsible for providing a number of high quality jobs for professionals.

7 Responses to Revenue loss partly to blame for new taxes

  1. samantha walker August 12, 2017 at 11:23 am

    What about the tax money that is disappearing and loaned out, the VAT that is not being picked up etc., doesnt that also account for the increased in taxes. But somehow, I just dont get it. Why is it only the poor that has to look for the deficit anytime there is a deficit with the businesses….. The businesses or the Government are not assisting the poor, so why should it be always the poor to make up any deficits those in power have.

    And by the way while we are talking about money, there should be proper Accounts kept, the Audit Reports show that Government is failing to keep abreast of loans and pick up VAT from some of the businesses and not everyone here pays their taxes.

    Come on, we no longer listen to what wunna got to say, we want to see papertrail of what is happening with the taxpayers money !! Loans to companies like Southern Golf and few poor blacks play golf, still no explanation or bulk payments to companies that close down…..

    Keep talking because until we see solid evidence of what is happening with our money, you will have disbelievers. Right now talk is cheap and you need provide evidence to back up your claims

    Reply
    • John Everatt August 15, 2017 at 12:22 pm

      This is true. The auditor general has reported on this for the last 10 years. No financial year end statements, shody accounting practises, money missing all over the place, taxes due never collected. And the list goes on and on every year only to be ignored by government. This in itself is a waste of tax payers’ money as the cost of the audit would be substantial.

      Reply
  2. Roger Headley August 12, 2017 at 7:58 pm

    This is so much comedy. With the NSRL resulting in less revenue to the business community, you expect more or less taxes?

    Reply
  3. Loretta Griffith August 12, 2017 at 8:55 pm

    There is no point imposing tax after tax when you are not prepared to collect it.
    PLEASE REDUCE THE VAT AND KEEP NSRL.
    In my opinion it is a more easily manageable tax and does not involve many third parties for collection.

    Reply
  4. JasonC. August 12, 2017 at 9:49 pm

    Hahaha… This is to much comedy.
    This is when you have someone who guessing or don’t know what they are doing.
    What do they expect when you keep bringing more taxing on poor people backs??
    Once again it shows education ain’t common sense and clearly the minister has all the brains/education.
    Sigh…..

    Reply
    • Jennifer August 13, 2017 at 9:49 am

      Well said. When them done edicate your a$$ you now need to go and educate yourself. The edication is faulty.

      Reply
  5. hcalndre August 12, 2017 at 10:32 pm

    The 2% growth in the first 6 months is only talk, trying to make the people feel that the economy is moving, well if it is so, take care of the Civil servants. The country has not seen 1% growth in years.

    Reply

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