Budget coming soon
Thu, 04/21/2016 - 12:05am
No date has been set as yet for this year’s Budget, but Minister of Finance and Economic Affairs, Christopher Sinckler expects to deliver that statement in couple months’ time.
His comments came while speaking to the media yesterday morning, at which time he was asked whether his Ministry was considering restoring some of the personal allowances that were removed in the June 2015 Budget, including house repairs and retirement savings plans. Minister Sinckler answered in the affirmative, even though he noted the challenges faced with doing so.
“We are giving thought to everything. As you know we indicated back almost two or three years ago, that we had to do a process of tax reform that we were simply not collecting enough of the tax, or not retaining enough of the tax revenue that we were collecting. The IMF study clearly showed that and in fact we really didn’t need an IMF study to tell us that, that was obvious at all levels. And therefore we have to find ways to help Barbadians to have more disposable income as I said, without having to go through this process of claiming for everything,” he said.
Sinckler indicated that the recession has negatively impacted Government’s ability to continue offering a wide suite of allowances. This, he explained, is due to the reduction in international business and investment which resulted in as much as a $200 million drop in corporation taxes.
“… A lot of those allowances which you see, and claims which you see in the tax system; a lot of other things around here in Barbados that we were able to do pre-2007 which the Arthur Administration was able to put in place, was predicated on that amount of money being available, once that money was not available – through no fault of our own – changes to international legislation in Canada… issues pertaining to financial transparency and companies having to move out – once that hit and that $200 million hold was blown in the corporate tax revenue and in the overall revenue gains for the Government, it made it extremely difficult to sustain all of these things,” he explained.
He made the comments as he also told the media that Government is pushing ahead with plans to further reduce the personal income tax rates. Last year he announced that the lower rate would move from 17.5 per cent to 16 per cent and the higher rate of 35 per cent would go down to 33.5 per cent. Sinckler said that in preparation for the Budget, they will look at bringing the rate down further, but he maintained it will be done steadily.
“We have to do it gradually because we are still doing fiscal consolidation so we have to ensure we don’t go too quickly and then cause the fiscal deficit to spike because the revenue is just not coming in,” he said.
Meanwhile, he disclosed that he was set to meet with staff from the Barbados Revenue Authority yesterday to discuss the efforts being made to move the threshold for value added tax registration from $80 000 to $200 000, which was to start from January 1, this year. He said the process is being put in place and should be ready for implementation by June. (JRT)