Barbados: A Tax Reform Roadmap for Simplicity and Revenue Buoyancy
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65 responses to “Barbados: A Tax Reform Roadmap for Simplicity and Revenue Buoyancy”
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[…] Barbados: A Tax Reform Roadmap for Simplicity and Revenue Buoyancy […]
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A future coalitional government of Barbados and of which the PDC will be a part shall absolutely ABOLISH TAXATION in this country and replace with the right fiscal and financial and commercial programs and strategies for the government of Barbados more properly and fairly than now coming by greater of its own remunerations, and for the government more properly and fairly than now being able to greater access and use money from out of the core financial system of this country.
PDC
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Here is what the IMF shares about the Solid Waste Tax:
The consolidation tax, intended to be temporary, has serious design flaws, and will need to be eventually incorporated into the personal income tax if it becomes necessary to maintain the revenue from this tax.
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Those who own land which has appreciated in value hare is what the IMF thinks should happen:
Concerning the taxation of individuals (Chapter V), the current tax has many attractive features. There is however scope to make it a fairer and more efficient revenue raiser. Consideration should be given to converting major allowances into tax credits, available at the lowest tax rate, and to tax realized capital gains on real property.
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“Reform of the Barbados Tax System: ICAB 4th Nov. Part 3” A lively panel discussion, moderated by Starcom Network’s David Ellis, followed the main presentation.
President of the Barbados Economic Society (BES), Jeremy Stephen, admitted he admired the Scandinavian system of fiscal management, which looks at taxation only as a last resort. Stephen was adamant that while the recommendations, if implemented, would provide a surge for two consecutive years, the medium to long-term effects might do more damage than the initial cuts.
Gloria Eduardo of PriceWaterhouse Coopers was guarded in her support of the measures. While declaring that the suggestions made would boost Government revenue, she remained uncertain as to whether the rise in capital would create the desired effect if there were still indirect tax streams that continued to go unnoticed – as currently takes place.
Chair of the Barbados Private Sector Association (BPSA), Alex McDonald, was emphatic in his objection to the IMF recommendations, as well as the way this current administration has been looking after the financial affairs of Barbados. In his view, Government inactivity has brought the economy to this stage. (http://loopnewsbarbados.com/2014/11/05/imf-tighten-tax-structure/)
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@ David | November 6, 2014 at 6:33 PM |
I am bit at a loss with what you have written.
The Solid Waste tax is different from the Consolidation tax.
Consolidation tax is levied on income whereas the Solid Waste tax is levied on land values. The only similarity is that both are direct taxes.What is your view on the IMF’s refusal to take into serious consideration The Governor of the Central Bank recommendation that the VAT system be scrapped and be replaced with a more straightforward manageable Sales Tax?
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Thanks Miller, error, error.
The IMF people suggested that VAT is a
potentially an efficient tax with significant revenue yield. In Barbados, however, the VAT base has been eroded by extensive domestic zero-rating and exemptions, leading to significant distortions and widespread compliance problems.
The GoCB is entitled to a personal view.
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There is a good argument to raise the VAT threshold and free up the under-resourced VAT Office now BRA:
First, consistent with numerous field observations in developing countries, the distribution features a very significant share of VAT collections at the top end of turnover ranges. Registered firms with turnover of BDS$ 1 million and over account for 88.6 percent of the total VAT paid in the sample.
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The Barbados tax business is looking to avoid the CLEAR TITLE land to be taxed , It appears that the government can not have a god tax system with out land reform based on law and not fraud, Both governments are full of shit and fraud. Nothing will work an they will jerk the public , The Ministers and all pimp title holders need to pay taxes they put upon the people,
More shit to come talk and talk ttill next elections, -
So the main short-term recommendation (next budget) is the scrapping of zero rating for VAT purposes of food and consumer items. That would raise $170 million. It would also raise some anger if it was done without some protection for low earners like increasing the level of reverse tax credit. Will the Monster of Finance do it?
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now remember most of these freebies and goodies were implemented by yuh all know who GovT) , now the chickens has come home to roost and the feathers are flying all over the place ,yes barbados economy has been running on steroids for a long time , now the bubble has busted and the true test of realism has come home with marching orders,. wunna ought to be ashamed of wunna self
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So far, I have only read the section on VAT and it is obvious that the IMF team was not in possession of all the relevant information before it sought to advise the Government. Before they tamper with the VAT any further, Government should seek to collect the arrears which registrants have collected and converted to their own use. It is unfair to ask taxpayers to pay additional taxes to compensate for a shortfall in revenue from VAT when so much has been collected but remains in the coffers of known VAT thieves, with Government making no steps to collect.
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Wait John Hanson is Deeds’ twin or pseudonym? This foolishness about “Clear Title” must stop, unless you can tell us what it means. Stupse.
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VAT places a disproportionate burden on the poor who pay a greater percentage of their income in taxes. If they remove the zero rating on food that would speed the demise of this inept government.
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What sales tax ,?no one is buying nothing, just food , light and water bills,
tourist seem to get more tax free things than the people who live in Barbados, New cars, Roll Royce , new van , better to take a tax or car pool in the case no funds to run the government , Car Pooling can help on a small Island, Never seen nothing like it , -
The IMF MUST learn how to contextualise their recommendations. They too often compare without contrasting.
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Hi David
Thanks for the article. I have read the section on VAT so far and based on what i have read there will be some compromises in the next budget. for example, while most zero rated items will most likely be taxed, the reverse tax credit may return to $1300 as a compromised. -
Enuff | November 6, 2014 at 7:17 PM |
VERY GOOD . YES ITS DEEDS , UP TO THE END OF LAST MONTH
THE FUCKERs BLOCK PLANTATION DEEDS ON BU AND BFP. -
if the standard rate is reduced
from 17.5 percent to 16 percent, bringing 40 percent of domestic zero-rated supplies (in value
terms) into the VAT net would more than recover the lost revenue. In fact, the extra revenue
would permit a restoration in the Reverse Tax Credit to BDS$1,300 annually for 15,000
household recipients.
@ Caswell,
Your comments on this in light of your above response -
@ David
Just this morning this report was not available to the public. What happened? It fell off a truck?Well if there was any residual doubt in anybody’s mind this should make the gravamen of our situation clear.
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@Thinker
Not so fast, William Layne and his 3-man team has to make a recommendation.
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Enuff | November 6, 2014 at 7:17 PM@
Clear title goes back 70 years, Barbados is using 20 year Good title to move the land from the owner to make money for self.and government pimps.
All land have owners and when the BLP look to crook land , and then the DLP look to do the same ,
With out clear title to land there can be no taxes paid, no loans from banks , no growth in a nation , Most land now taking from the estate with out payment and the Minister are paying them self twice and hiding the the rental , Just like Mr Todd, All ready they areYour comments is awaiting moderation, is well posted now over the post very fast , crook never sleep , We glad we got them on the Run,
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@Pacha
We have friends in all the right places sometimes. A little disappointed our sources from the two political parties did not share the document with us yet they see value in frequenting our forum.
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@David
Good get!
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Clear Title
Unencumbered or unrestricted legal ownership that is free from doubt as to its validity.
The phrase implies that ownership is not subject to claims by anyone but the person holding title. It is also called marketable title, or title that can be easily transferred or sold because of its lack of encumbrances
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Cloud on Title
An apparent claim or encumbrance, such as a lien, that, if true, impairs the right of the owner to transfer his or her property free and clear of the interests of any other party.The existence of a cloud on title casts doubt upon the ability of an owner of real property to convey marketable title to his or her land, thereby lessening its value. The owner must present evidence to dispel the cloud on title if he or she wants to transfer ownership free of legal uncertainty. One method to remove a cloud on title is the commencement of an action to quiet title.
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cloud on title (cloud) n. an actual or apparent outstanding claim on the title to real property. “Clouds” can include an old mortgage or deed of trust with no recording showing the secured debt was paid off, a failure to properly transfer all interests in the real property (such as mineral rights) to a former owner, a previous deed which was improperly written or signed, an unresolved legal debt or levy by a creditor or a taxing authority, or some other doubtful link in the chain of title. Often the “cloud” can be removed by a quiet title action, by finding a person to create or execute a document to prove a debt had been paid or corrected. Title companies will refuse to insure title to be transferred with a “cloud,” or they will insure ownership except for (“insure around”) the “cloud.” (See: chain of title, quiet title action, mortgage, deed of trust, reconveyance, title, title report)
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So what if they “raise more revenue” still going to waste it on non productive, non stimulating expenditure. Never give a spendthrift
a shiny new credit card…. -
I wonder how much this consultation, analysis and recommendations cost the taxpayer?
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@ Thinker
Looka doan mek muh laugh!!
Once the government taking in more revenue, people are obviously paying more i.e. greater burden on the same people all yuh claim to love. -
Oh shirrte!
36. Agriculture should not benefit from preferential VAT treatment. The agricultural sector accounted for only 1.4 percent of GDP in Barbados in 2012. Given the very broad zero rating of food and agricultural inputs, the sector has effectively been taken out of the VAT net. Zero rating inputs of large-scale producers, whose output may be exported in part, carries little incentive for them; their exports would be anyway zero-rated and tax paid on inputs claimed back. There is also no compelling reason to treat small-scale farmers or fishermen, with turnover below the VAT registration threshold, differently from other small suppliers. In fact, there are very compelling administrative and revenue reasons (see earlier discussion of threshold) to leave them as exempt traders: it simplifies administration considerably, and generates VAT on inputs provided that inputs are subject to VAT at the standard rate.
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[…] By David […]
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When did a post of DLP Representative for St.Michael South East become a part of our representative politics? And we wonder why we are where we are.
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Enuff we dont have to wounder , As soo as you look to know and understand where the tax base is you will know . Taxes comes from the land and many do not pay taxes , By Law they dont have to for they dont have a DEED, The deed must have clear title in order for the government to enforce the law,Many people have tax bills and no Deed, Many have deeds and pay no taxes at all, many now have rental units like Many Ministers and pay not taxes at all where 17.5% to be paid each month on rentals, All the rentals are to be recorded at the Inland Rev,
So understand and to know how its done ,
Talking heads just killing time till next Elections .
The white IMF and WB know the tricks and lie of the DLP and BLP ,
Its time for the stupid People of Barbados to wake up and check things out for self , -
Is it not ironic we deregulate the telecommunications industry in Barbados, competition enters and force cost of services down and in response to the growth in the segment there is the opportunity based on the IMF report to tax the sector. Consumers never win in the assault to extract revenue.
Is it BU or does the IMF Report read like a money grab?
48. An excise tax on mobile airtime services poses a small risk but presents an attractive revenue opportunity. In developing countries with poor land line systems, mobile telephones can contribute to development and growth by facilitating the creation of new market networks and reducing the need for expensive transportation. In Barbados, there were 122.5 mobile telephone subscriptions per 100 inhabitants in 2012, a number substantially above the global average of about 94 calculated over 228 countries. It is therefore unlikely that a moderate excise tax would significantly hamper the network or the adoption of new subscriptions in the future.
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We see you all getting trap again in this TAX bull shit side talk , Who ever the thinker is need to thnk facts and Law and not DLP and BLP party delay talking to buy time , To extend their term in office,
Thinker study any other nation and see where taxes come from in the CC and stop being fooled by fools ,
Thinker need to start thinking , unless your name is Mia ans Owen who got the Ball rolling with this bull shit Massive Fraud,Now all you see and read is ways to cover it up by acting like it have to do with world events,
Everyone out side of Barbados knows what is going on and yet you fools inside making mudd pies, while people make you think is apple pie. -
In the IMF 2013 Article 4 Consultation Staff Report it is stated on p.23 that the Barbados “tax system would benefit from a comprehensive review with the aim of broadening the base, improving equity, and reducing distortions and the scope for discretion. The authorities have requested Fund technical assistance to review domestic taxation, which is expected in 2014.”
Absent the detailed terms of reference for the Krelove/Crivelli/Gendron technical assistance report it can safely be assumed that the scope and direction of their study was agreed at the time of the Article 4 Consultation Mission. It is difficult, therefore, to foresee how the GoB can avoid implementing the major recommendations in the report, however publicly unpalatable they may prove without serious risks to its credibility with the IMF. This, notwithstanding the disclaimers that have emanated from certain spokesmen for the Government, to date.
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What is the logic driving the decision to avoid the IMF at all cost when it is obvious so called homegrown policy is being largely driven by IMF input.
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LCH; re. your 8:19 am post; Beautifully reasoned. They have very little choice. We got tuh titun we belts!
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David; re. your 8:45 am post. It is just the usual smoke and mirrors.
I remember in more than one of our neighboring countries that the Politicians would be protesting (usually on a Friday morning) that they would never agree to an IMF programme and then the information that they had actually signed on to a programme that day would come on the same friday night through the GIS. Watch out for Fridays!
Our politicians and would-be politicians are playing to their yard fowls and the eternal optimists who can’t think for themselves.
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Ole onion bags has gone on to the great beyond ac is truly saddened to hear of his passing .
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ac; Who was “Ole onion bags”?
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How many people will have to be hired to implement all these changes which are all necessary for one reason. “we are spending more Foreign Exchange than we bring in. Until that changes turmoil will continue.
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@ David and BU F1 fans.
practice 2 about to start.
Racing fans in Canada it is on TSN2HD.
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Just making my way through the report. Whether you like their recommendations or not, its clear that having someone do a report like this who is aware of what happens across the world has got to be of benefit.
The bit on increasing the VAT threshold is interesting. On the face of it, you would think that it would be better if more VAT was generated by reducing the threshold. The IMF view (as people have mentioned above) is that it just isn’t worth the hassle of having 3,100 VAT payers accounting for only 3.8% of the tax paid.
I bet that’s an conclusion that we would not have come to ourselves. -
AWTy
ole onions was one of the funniest and nicest person u would have wanted to meet and know
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@ SITH
“we are spending more Foreign Exchange than we bring in. Until that changes turmoil will continue.”
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THAT is much too obvious, logical, simple and practical to EVER be acknowledged by our people and their “economists” advisors.UWI trained brass bowls always have to look for complex hifalutin shiite reports from high-charging ignorant outsiders for every little problem.
….like holding a commission of inquiry to deal with a few menopausal teachers…. now we will need another commission for Parkinson and one for Alma Parris.
….and like IMF experts to tell us we are spending more that we are earning….. -
Consumption expenditure must be satisfied at all cost. It was in 1991 we went through the exercise 8% public sector cut, retrenchment and the like, 2014 we are here again. We allow politicians to do this to us all the time.
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@David how much do we do to ourselves?
Bajans need to stop the voracious consumption of imported crap.
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@ Hants | November 7, 2014 at 12:00 PM |
Some of Lewis’ fans believe he sand-bagged it today so that Nico Rosberg wouldn’t copy his his setup data for qualifying tomorrow. What do you think?
The blogmaster invites you to join the discussion.