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Financial News

Dec 2014 Financial News

No new taxes (Barbados)

Dec 17, 2014

Barbadians will not face any new major tax reform measures, at least for the time being.

This assurance has come from Christopher Sinckler, the Minister of Finance and Economic Affairs, who indicated that no such measures will be implemented before the scheduled April 2015 Budget. Moreover, he said those who have taxes due by December 31, 2014, will receive a three-month amnesty from penalties and interest; and the Freundel Stuart-led Administration intends to revisit and review the controversial Municipal Solid Waste Tax, to determine whether its continued existence in its present form is justified.

Delivering a Ministerial Statement on the current state of the economy, he explained that Government has made the determination not to introduce any new tax reforms, in spite of the suggestions of the International Monetary Fund’s tax study on Barbados. He added that while the IMF’s study has provided a comprehensive basis for reviewing the country’s tax system, Government is “not satisfied” that the required impact analyses of any proposed adjustments to the structure of the tax system on key growth sectors and vulnerable groups in society are complete.

The Finance Minister made the point as he suggested that the economy is showing its strongest signs of recovery since 2009, and so they think it prudent to “exercise an abundance of care” in introducing new measures that may derail a return to sustainable growth.

“In light of this, and together with the discipline which we intend to place on supplementary budget allocations, we have determined that additional smaller expenditure cuts across the board and more efficient targeted collection of existing taxes to effect gains of $32. 8 million will be sufficient to get us close to our deficit reduction target,” he added.

Turning his attention to the tax reprieve, Sinckler told the Lower House that the short-term measure will be applied to all taxpayers across all tax categories on the interest and penalty accrued on taxes owed at December 31, 2014. According to him, to access to this facility the taxpayers must pay their total outstanding principal owed to the Barbados Revenue Authority on or before March 15, 2015.

“It means that with no additional tax impositions in the current fiscal year, a new revised deficit target of between 6.8 per cent and 7.2 per cent of GDP, instead of the original 6.6 per cent of GDP, is more realistic and likely. We are nonetheless therefore on course to effect a reduction in the fiscal deficit by between 5.3 per cent or 5.6 per cent of GDP for 2014-15,” stated the Finance Minister.

He revealed that among the other key decisions made, is that the existing revenue measures that formed part of the 19-month stabilisation programme will be extended for another financial year, or until April 2016. His comments came as he also explained that the Government does not believe that they can cut or tax their way to stability and growth. (JRT)

 

Source:
Barbados Advocate
Wednesday December 17, 2014

http://www.barbadosadvocate.com/newsitem.asp?more=local&NewsID=40540