‘We will forgive you’

New party promising 100 per cent debt relief if elected

With elections around the corner, a new “economic solution” has been put on the table that, if deemed feasible by the electorate, will not only lead to a repeal of the dreaded National Social Responsibility Levy (NSRL) and the like, but also 100 per cent debt forgiveness on the part of Government.

The revolutionary plan was unveiled at the weekend by none other than the political party that goes by the name ‘Solutions Barbados’.

During a public launch event on Saturday, the party’s economic spokesman Scott Weatherhead bitterly complained that Barbadians were at the point of “tax saturation”, before revealing the Solutions Barbados plan which he described as “the complete opposite of all that has been done” by the “two obsolete parties” – the incumbent Democratic Labour Party and the main Opposition Barbados Labour Party.

Scott Weatherhead

“Our economic solution does not include going to the IMF [International Monetary Fund] to borrow any more money. It does not include more taxes. It does not include more austerity. . . [but] we are proposing to put money back in your pockets by reducing taxes across the board, so as to reduce the cost of living in Barbados, so the citizens of this country can live and eat once again,” Weatherhead said.

The party’s economic plan includes a “ten per cent flat tax” which is to be implemented across the board, and would replace the Value Added Tax (VAT), as well as the NSRL, the two per cent foreign exchange commission and other measures which were recently announced by Minister of Finance Chris Sinckler in his May 30 Budget.

As part of its ambitious economic strategy, the party is also promising to remove the 25 per cent corporation tax on profits; the 35 per cent personal income tax; and the excise tax on fuel, and to either reduce or remove import duties on a range of items.

While acknowledging that over $1 billion was currently owed to Government in terms of tax and other arrears, Weatherhead argued that there was more to be gained in terms of economic stimulus from forgiving those debts than keeping them on the books.

“So if you owe the Government of Barbados money in land tax, solid waste tax, road tax, VAT, corporation tax, personal income tax, or any money whatsoever, we will write off your debt completely, and you will no longer owe the Government of Barbados a red cent on the day we are elected to office in this country.

“That is a guarantee. So everybody will have a clean slate to start off this new tax system with. But we will expect everybody to be tax compliant from then on,” he explained.

Solutions Barbados is also proposing to remove current taxes levied on the banking sector, and as an incentive to get businesses to bring home any foreign currency they earn, to tax them at five per cent on their foreign exchange.

Additionally, the ten per cent flat tax will not apply to the offshore sector.

However, among its many promises the party said it would no longer tax retirement benefits in Barbados, while it would establish a new National Development Bank; make all state owned enterprises accountable and empower the auditor general to take action against those state owned enterprises and statutory corporations that do not file their financial statements on time.

During his speech Weatherhead, who is the candidate for Christ Church East Central, also assured that his party’s proposals were “not cheap political ploys to get votes”, but “carefully crafted economic measures to boost the foreign reserve, and to stabilize and grow the economy of this country”.

In fact, Weatherhead touted the imposition of the flat tax on gross income as a means of dramatically improving the spending power of Barbadians.

“That means that the old couch that the dog bit up, you can finally send to the dump, and you can buy a new one . . .  that the old car that you have been driving around for the last 15 years . . . you can finally get rid of, and buy a new car . . . the house that needed painting for the last ten years, can now get painted . . . the rusted out fridge and washing machine that needed replacing for the last ten years can now get replaced, because you can finally afford to do these things,” he told those gathered in Independence Square, The City for the event.

Weatherhead also suggested that while Barbadians were currently only able to hold on to 70 cents in every dollar, with the Solutions strategy, they would be able to keep 20 cents more of what they earn in their pockets, which he said could only redound to national economic growth.

“This is not a tax system that Solutions Barbados came up with. It is a modern, tried and tested tax system, which has worked extremely successfully in at least 37 countries around the world, including some right here in the Caribbean, and 11 US states,” he said, while describing the current tax system as “antiquated and outdated” and full of loopholes.

A number of countries in Eastern Europe have introduced some form of the flat tax in a bid to boost economic growth.

Estonia was the first European state to do so when, in 1994, it replaced three tax rates on personal income, and another on corporate profits, with one uniform rate of 26 per cent.

It was followed by Latvia, Lithuania, Russia, and later, Slovakia, which imposed a uniform 19 per cent tax rate on personal and corporate income, in addition to a 19 per cent VAT.

12 Responses to ‘We will forgive you’

  1. Nicholas Mackie
    Nicholas Mackie November 27, 2017 at 10:24 pm

    Philip Tony Wilson

    Reply
  2. hcalndre November 28, 2017 at 3:46 am

    The people of Barbados would be stupid even considering to vote for you, if with all these alphabet names for taxes that the MOFailure uses and he can`t get nothing work and now you are saying that you would clean slates and come fresh, with what, Talk?

    Reply
  3. Barbados2.0 November 28, 2017 at 6:18 am

    That would be the end of the offshore sector in Barbados! The current administration has apparently done everything to kill that sector, but quadrupling the tax rate they pay would be the death knell.

    Beyond that, let logic prevail. If the NSRL, at 10% is just a single component of government’s current revenue, how are you suddenly going to afford everything by reducing/removing other taxes? Of course, if you reduce your income, you’ve got to reduce your spending, so how do you propose to do that? Send people home?

    Either way, if there is even the slightest chance that SB might get in, I’d better go and run up some government debt really fast.

    Reply
  4. Michae chow November 28, 2017 at 7:45 am

    Good bold thinking! Hope all bajans brave enough to accept!

    Reply
  5. Saga Boy November 28, 2017 at 8:04 am

    I wonder how much taxes Scott himself owe gov. Let’s check on that first. He is no role model in the business sector. Ask his former employees.

    Reply
  6. Peter Thompson November 28, 2017 at 8:24 am

    Let’s take a look at the fiscal implications of these policies:
    1. Forgive $1 billion in tax arrears = $1 billion added to debt
    2. Repeal NSRL = $500 million/year added to debt
    3. Eliminate corporate income tax = $250 million/year added to debt
    4. Replace 17.5% VAT with 10% tax on corporate revenue = $400 million/year added to debt
    5. Replace progressive income tax with 10% flat tax = $150 million/year added to debt
    6. Refuse to negotiate with IMF to reschedule the $2 billion in external debt coming due over the next 4 years at 5% instead of the 12% to 15% it will cost because of our trashed credit rating = $180 million/year added to debt because of interest costs
    7. Apply ten per cent flat tax to the offshore sector = $90 million/year added to debt because the offshore sector will immediately move to jurisdictions where they are taxed at 2% or less

    Reply
  7. Peter Thompson November 28, 2017 at 8:33 am

    Scott Weatherhead is not telling the truth about their proposed tax system. He cites the tax systems in Estonia, Latvia, Lithuania, Russia, and Slovakia to claim that they have a similar system but that is a blatant lie. Google it for yourself.

    Estonia, for example, taxes corporate PROFITS at 21%… nothing at all like Solutions’ ridiculous scheme to tax corporate REVENUE at 10%. The claim that “It is a modern, tried and tested tax system, which has worked extremely successfully in at least 37 countries around the world” is a complete and utter falsehood.

    There is no successful tax scheme that taxes corporate revenue and leaves corporate income untaxed anywhere in the world. The tax on corporate revenue will be added to the register receipt and the consumer will pay every cent, leaving the corporation paying no tax at all.

    Reply
  8. Leroy November 28, 2017 at 9:00 am

    I think this group has to first examine each state entity to determine its function and the financial inputs needed to deliver its mandate.(qeh,uwi,agriculture,sanitation,transport ect…..)

    Then after assessment, reshape the structures to the desired effect, a single piece of paper saying replace all taxes with a 10 percent tax just would not fly without even getting into the details of NSRL,VAT, ect.

    Reply
  9. Fallon Best November 28, 2017 at 10:58 am

    @Peter Thompson… your analysis and comparison is completely flawed. Mr Weatherhead did not say that those other jurisdictions were taxed at a same proposed rate of 10%. Mr Weatherhead compared that many other countries have a similar flat tax on gross revenue. The rates vary according to their own marginal elasticity and difference in tax burdens between working class and corporations. Anyone that understands Barbados’s tax burden knows that a disproportional amount of tax falls on the working class vs. corporations.

    Reply
  10. N. Payne November 28, 2017 at 12:20 pm

    Barbados will never get out of this fiscal mess, without a fairer tax policy. E.g. I’m currently paying more in taxes for a empty lot , than some in my neighbors with $500.000 dollar homes.How does this make sense when I’m receiving zero services. Utter nonsense!

    Reply
  11. Sue Donym November 28, 2017 at 12:24 pm

    You will forgive us if we’re not too eager to vote in hopes of your vague, airy fairy sounding ideas. Most flat rate jurisdictions seem to be set well above 10% and apparently do levy additional taxes.
    This would suggest a future increase in rates, additional taxes not disclosed or fees on a wide range of government services. These are the possibilities that come readily to mind, but we would want to hear substantial details.

    Reply
  12. Peter Thompson November 28, 2017 at 3:44 pm

    Fallon Best, the countries that Mr. Weatherhead cites do NOT have a flat tax on gross REVENUE, they have a flat tax on gross INCOME. There is a world of difference. You are completely correct that “Barbados’s tax burden knows that a disproportional amount of tax falls on the working class vs. corporations.” The problem with Mr. Weatherhead’s proposal is that it makes that situation much worse. He proposes to reduce corporate income tax to 0% and instead tax corporate revenue. A tax on corporate revenue is a tax on corporate sales: a sales tax that simply gets passed on to the consumer, you and me, leaving the corporations paying no tax at all.

    Reply

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