Atherley knocks ‘ad hoc’ nature of government’s fiscal policy

OPPOSITION Leader Bishop Joseph Atherley has knocked the ad hoc fashion in which the government’s fiscal measures are seemingly being implemented.

In his reply to the Appropriation Bill 2019 in the Lower Chamber yesterday evening, Bishop Atherley drew reference to a number of changed policies which he says are coming across as impulsive.

Bishop Atherley used the change of water rates for businesses as an example. “At July 1 2019, the second tax band will be over $50 000 and at a rate of 33.5 per cent. Then we are told by January 2020, it will drop back to 28.5 per cent. There seems to be a lot of movement. A lot of fluctuation in tax policy,” he stated.

“I do not know that makes for certainty and gives comfort either to the business community or to the private taxpayer. It almost suggests that the government is engaging in fiscal policy formulation by impulse. Whatever the driver, both individuals and businesses suffer injury,” he said.

He pointed to the hotel VAT rate intended for January 2020, to move from 7.5 to 10 per cent rather than 15 per cent as previously indicated.

“At the same time as that proposal was made last year, it was said as a temporary measure as we reach that level of VAT, in this context, there would be a room-rate levy which would be temporarily applied. We are told now that temporary room rate level is now to be permanent, even as the VAT moves from 7.5 to 10.”

He also pointed to the move in Corporation Tax rate from 25 per cent to 30 per cent some months ago. “Almost before the ink could dry on those documents, we were hearing that the tax rate...was then to be brought back to a point of 1.5 to 5 per cent.... so that we could satisfy some requirements with respect to our overall corporate tax rate, vis a vis domestic companies and international business companies to satisfy international institutional requirements. So that was a change. I am suggesting that one could easily think that there is ad hoc and impulse at work in these very important matters.”

The Opposition leader also alluded to the 40 per cent tax rate in the first budget of June to be applied to those earning $75 000 and up.

“We are now doing away with that. We announced a debt restructure which captured in its net a class of pensioners in Barbados, relative to a specific category of security. They were caught in the debt. And after hue and cry, government changed its position...”

“Debt restructuring to pensions was revised as well. There is the impression that there is ad hocism and impulse at work.”
(JH)