Government Taxed A Tax

Submitted by GoWEB Caribbean – Written by Caswell Franklyn

 

Chris Sinckler, Minister of Finance

The Minister of Finance announced in the 2010 Budget that travelling and entertainment allowances would be taxed. That proposal generated much debate about the hardship that would be visited upon certain sections of the Public service.
One major union even informed its members, that it was able to negotiate a concession where the allowances would be added to workers’ salaries for pension purposes. Unfortunately, the benefit of that concession would not be realised by any person who works for less than $4,090 per month.

When the proposal was announced in the House of Assembly, an Opposition member accused the Government of taxing the workers’ allowances but not those of Members of Parliament. It was pointed out that the Ministers and Parliamentary Secretaries (Remuneration and Allowances) Act exempted MP’s from the payment of income tax on those allowances.

In order to make sense of the proposal, I started from the premise that, prior to the budgetary proposal; travelling and entertainment allowances were not taxable since Government was now introducing a “new” tax. If those allowances were previously exempted from the payment of income tax for everyone, in accordance with the 1968 Income Tax Act, why would MP’s pass the Ministers and Parliamentary Secretaries (Remuneration and Allowances) Act, in 1979, to exempt themselves from a tax that did not apply? The answer is simple: those allowances were always taxable, except for travelling done in the performance of duty.

Section 9 of the Income Tax Act exempted allowances: for travelling expenses; or maintaining and operating a vehicle, to the extent that the allowances may reasonably be regarded as representing the cost to the person of travelling in the performance of the duties of an office or employment. Put simply, persons who receive travelling and entertainment allowances as perks should have been paying income tax all along.

It would therefore appear that Government imposed a tax that was already imposed, and it is causing hardship for persons like Court Marshals. They must travel in order to carry out their duties; however, their reimbursement is capped at $553.85 per month and now taxed. This is unreasonable since they use their taxed salaries to travel to facilitate the Government’s work, and when they are reimbursed, it is taxed again.

Government must realise by now that it made a mistake, and take steps to relieve the unnecessary burden that it placed on Court Marshals and other workers who incur expenses to perform their duties.

0 thoughts on “Government Taxed A Tax


  1. I second that notion.
    I wonder when Barbadians will get up off of their lazy tails & speak out when these wrongs are done to them?
    They grumble under their breaths & complain to each other, but when the powers that may be make an appearance, they skin their teet to the wind like road kill.
    I am sick & tired of the underground grumblers. What do they expect to gain from this?
    In the UK this is done. Your travelling is taxed. You have to purchase your own vehicle, every year MOT & tax it, insure it & if you are a travelling officer, you are required to have special insurance, (especially if you transport clients in your vehicle), petrol prices are rising weekly, but travelling allowance remains the same. You are paid by the gallon & the amount is determined by your job description. Payment is in pence not pounds.
    When some jobs are advertised, they stress that the job requires the applicant to have a clean valid driver’s license & you are also required to own your own vehicle.
    Some staff should check their job descriptions & contracts to see if any mention is made regarding the use of their personal vehicle for the purpose of work.
    If the government’s tax policy will disadvantage the staff, then they should provide the vehicles for the staff to use. Travelling officers are often times forced to take their vehicles in some places that are not best suited for access to vehicles, some travelling officers are forced to park their vehicles & walk distances to access clients. Repair to the wear & tear of vehicles is left solely up to the owners & even with the bad roads throughout the country, shocks, breaks, tires & suspensions are at risk of greater & faster deterioration, as a result of having to access clients via bad roads. Road taxes are paid by the drivers, yet they are forced to drive their vehicles on poorly maintained public roads.
    Government Ministers drive their vehicles to work, park them under their sheds & are driven in allocated government vehicles. The AG & PM are allocated their own MP vehicles, ( with security), while their personal vehicles are left parked in their garages at home. Tax payers foot the bill for the upkeep of these MP vehicles. So travelling officers pay 3 times!
    When will the DLP learn not to test the tolerance of Barbadians. Barbadians have very good memories, but are a forgiving people. Time heals, but these actions are rekindling memories of the 8% salary cut. I believe this action is the cause of the DLP being places on the side bench to sit out play for a few years.
    With salary freezes & cuts across the private & public sector, workers cannot take any further cuts or taxes. They have to feed & educate their families. Government Ministers are given entertainment, travelling & housing allowances, but still access government vehicles on a daily basis.
    Having said that, there are a small percentage of travelling officers who have taken advantage of the system & have abused it to the fullest extinct. We are now seeing the results of the theft, pilfering & dishonest dealings of some government workers, who cook the books for personal gain & fail to do an honest days work by completing a 40 hour shift. The result of long lunch breaks, tardiness & loss of interest in the job which affects production is now being seen. The cracks are wide open thanks to the global recession.
    Maybe these government workers should reflect on their past actions & see the err of their ways. Rome has fallen! Who would have ever thought the Barbados government would go broke?
    Yes! I think government should reflect on their decision & reverse it.


  2. TOO MANY ‘WEEK’ LEADERS IN THE PUBLIC SECTOR
    THEY GO TO WORK TO SEE THE WEEK THROUGH

    LAZY AS ASS-AINT SAYING NUTTIN BOUT ‘NITTIN’ -JUST WAITING FUH PENSION

    BAR-BAD-US IS IN SERIOUS SHIT


  3. Caswell and Dawn Rollins;

    I essentially agree with you on the above if they are indeed taxing the travelling carried out by employees in their own vehicles which is reimbursed on a monthly basis depending on certified actual miles travelled on their firm’s or department’s business.

    But there is at least one other tax that is now being levied on moneys that have already been taxed. It is the income tax on NIS pensions. Government needs to do an actuarial study on this to determine the quantum of income tax allowances or deductions that should be given back to pensioners to make this tax a moral and defensible one. NIS compulsorily deducts a percentage of all documented workers’ salaries. The Employer (including Government) adds the same amount on behalf of each worker and the total is invested and when the worker retires he/she is paid pension from that investment fund. There is no income tax deduction for NIS paid on ones own behalf. About 60% of NIS benefit funds are paid on pensions.

    These double taxes affect all pensioners, as well as government and other workers who travel on their companies business. It isn’t Government workers only. Yet there does not seem to be any noticeable outrage re. these practices. I wonder why?


  4. Off topic
    Four (4) US citizens captured by Somali freedom fighters were killed.Very interesting indeed

    In Trinidad an Indian little boy eight (8) years old was found dead in a river.Trinidad Prime Minister the Indian Kamla Persaud Bissesar visited the family of the dead child along with some members of her cabinets and offered condolences.She indicated the perpetrator or perpetrators of that crime will be caught even if it takes international assistance to do the job.
    In Trinidad many Black Trinidadians including little Black children are murdered occasionally and at no time did that Indian Trinidadian Prime Minister or members of her government ever visited the Black families of the victims and offered the support she is offering that Indian family who unfortunately lost a member in tragic circumstances.
    Black Barbadians please observe how Indians in Trinidad look out only for their own and those Indians do not give a damn about any Black person’s life.
    We Black People are living in some very interesting times.


  5. @Negroman

    Do our BLACK Prime Ministers give comfort to the families of black children who are murder victims Is it that they do not care about anyone of any race?


  6. Further from that anonus the majority of family of the kidnapped victims who where killed during Mannings tenures never got any visits either. I guess he care for none of them too. smh


  7. @ jack spratt
    Your statement is not accurate. Travelling, entertainment and utilities were the only allowances not subject to taxation. However, when completing the income tax return, total remuneration, including these allowances, had to be entered on line 100. Itemised allowable expenses were to be reported on lines 104, 106, and 108; the total of which were entered on line 115, which would then be deducted, (along with other allowable deduction) to give the total the total assessable income at line 283.


  8. A wind of change is in the air, or as Scott McKenzie so rightly put it in his 1967 hit song San Francisco,
    All across the nation,such a strong vibration,
    People in motion, where a whole generation,
    with a new explanation,People in motion.
    Not only has the despots of this world have to look out, as we have witnessed in the Arab world, but our very own home grown Elected Dictators so common in the Caribbean, should also sit up an take note.


  9. I wish ignorant bigots could “devolve” and go back to a tree in Africa. The world would be a much better place, although the ape population would significantly explode.


  10. David
    Did you notice that Minister Sinckler went to the House of Assembly on Tuesday, March 8, 2011 and reversed the decision to tax travelling officers in the Public Service. I am not 100% certain that the Minister read my post but I suppose I have to take his word that he was advised by the Commissioner of Inland Revenue. My question is who advised him to impose the tax or did he act without advice?


    • @Caswell

      The guys on both sides monitor the blogs.

      Your question is valid though, the same civil servants who advised the previous government should still be in place know?

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