The Barbados economy is estimated to have grown by 0.5 percent in 2015, thanks mainly to a stellar tourism performance. There was a 13 percent increase in airlift from major source markets, an expansion in room stock, and refurbishment of aging hotel plant. The tourism outturn was the best on record since 2007, with activity…
The Barbados economy is estimated to have grown by 0.5 percent in 2015, thanks mainly to a stellar tourism performance. There was a 13 percent increase in airlift from major source markets, an expansion in room stock, and refurbishment of aging hotel plant. The tourism outturn was the best on record since 2007, with activity in the sector rebounding to pre-crisis levels. Tourism receipts grew by an estimated 5 percent, with arrivals up by 14 percent, and all major markets recorded double digit increases.
@Artaxerxes, I have been mainly focusing on the Davos sessions on global trade but from the sessions I watched on the global economy and global finance, business leaders’ confidence in the global economic and business environment is very pessimistic. The major risk raised in the sessions has been the impact of China’s economic transitioning on the global economy, as well as falling oil prices. When you get a chance, check out in particular the session “How to Reboot the Global Economy”. That was one of the most interesting sessions. Joe Stiglitz was one of the panelists.
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millertheanunnaki
@ NorthernObserver January 22, 2016 at 6:54 PM
“Fact is, income tax, both individual and corporate, have been on ‘life support’ in most places for a long time. This is just pulling the inevitable plug.”
I guess you are wise enough to appreciate the far reaching ramifications of any move to eliminate the income tax system (both individual and corporate).
Many accountants and tax advisors would find themselves out of work or without large fees income to maintain their ‘specialized’ practice. This significantly influential ‘pressure’ group would not allow their source of easy income just go by the wayside.
It would be also interesting to find out if such a proposal is recommended Only for third world or developing countries such as those found in the Caribbean region. Or do you see a wider application, especially to Western or North Atlantic capitalist economies?
Such wider application will evidently result in the demise of the tax havens and other offshore tax planning and financial enclaves.
What would happen to Barbados’s much promoted IBC sector and the Treasury’s dependence on this source of revenue? What would replace them for the country’s economic survival? Would this result in 100% dependence on Tourism now being threatened by the side effects of climate change (global warming) and its environmental impact?
A compromised proposal can be put on the table for semi-socialist societies like Barbados in which the assessment, reporting and collection of taxes on income (not revenue) is significantly simplified by eliminating all ‘tax’ deductions except an across-the-board personal deduction of say $40,000 equivalent to an estimated ‘living wage’ for the average worker.
Tax would then be levied at a standard rate of say 10% on income above that threshold up to $200,000 per annum and 12% on income in excess of that $200,000 tier or upper limit.
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NorthernObserver
@miller
I think ALL of your points are valid.
I could extend that to proffer what about Uber vs taxi? Public bodies everywhere charge specific fees/licenses annually upon taxis? Airports charge exorbitant fees for pick-up rights, but Uber can skirt these too.
What about business models like travel agencies with the onset of internet agencies? Then similar but opposite; if you wish to find lower cost accommodation in Bim you go to AirBnB, now private folks renting out extra space or smaller establishments. Instead of flowing $$$ to the mass providers [Expedia etc]
IBC was all good, and an indirect form of foreign aid by the treaty signers, until every developing nation has the same offering? And what is good for the goose is good for the gander? So as discussed on BU previously, high income individuals and corporations from Bim have been establishing themselves in neighbouring IBC’s like St.Lucia in increasing numbers.
Specific to income tax, the same groups who stand to lose, are the ones who lobby so hard for its complication, forcing people to use their services. Yes, at some point govt’s [the tax collector] will see the benefits in simplification. Your proposal is well within the concepts of “much better”.
The switch has already begun, meaning, a movement towards levies which are easily COLLECTIBLE. The heavily concentrated products are easiest, like cell phones, as gov’t can download this to the few providers who then re-mit to government. Easy and inexpensive. And consumption taxes, which are re-mit, only getting monies out of a wide section of collectors always has leakage issues.
Another trick/change is when they place the levy. Items like tyres, electronics and other discarded consumables, they charge the disposal fee when you buy them? Be sure another target will be packaging in general, for in our disposable society, much of the garbage is packaging.
Bottom line, revenue collection will be govt’s greatest challenge; for they are not known for their flexibility/creativity. On the counter side, expense control is killing many. When employment by either direct or indirect gov’t funded bodies passes 40%, their is a problem; and many societies everywhere have passed the 50% mark.
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Vincent Haynes
It boggles the mind that our only engine of growth presently ticking over is tourism and nobody is looking after it.
The Scotland District is the most scenic part of Bim and a must see for Tourists.
I just came back from the east coast road and as I sat with some friends outside a known watering hole,we saw tour busses passing on a regular basis and that led us to wonder how often the shocks and body parts had to be changed on the coach and if any tourist would travel that route again,after no doubt being totally traumatised when the went through Glenburnie…………our roads are simply not fit for purpose.
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Artaxerxes
I eagerly await tonight’s discussion forum with GCBB Dr. Delisle Worrell, entitled “Barbados’ Current Economic Performance,” and a select panel, which includes David Ellis as the host; Jewel Brathwaite of the Advocate Newspaper; Professor Andrew Downes; Lisa Gale, Executive Director, BCCI; and Lisa Padmore, President, ICAB.
The blogmaster invites you to join the discussion.