The George Brathwaite Column – Sinckler’s ‘vicious’ Tax Take
“Taxation without comprehension is as inimical to democracy as taxation without representation.” — Lawrence A. Zelenak (USA Professor of Tax Law).
Barbadians have been feeling the bludgeoning of austerity over the past few years. The further lambasting of the Barbadian people by the dreadful Freundel Stuart-led Democratic Labour Party (DLP) did not end with last week’s harsh Financial and Budgetary Statement. Hurtfully, Barbadians must brace for the worst which comes after July 1st when the roll-out of burdensome tax measures are to be implemented. The increased taxation, through a fiscal blow by Finance Minister Christopher Sinckler, will push the already high cost of living through the roof. Sadly, the measures put to Barbadians by Sinckler and supported almost in entirety by DLP parliamentarians are inimical to democracy, to the welfare of Bajans, and to Barbados’ national development.
Clearly, by announcing that from July 1st the rate for the National Social Responsibility Levy (NSRL) will move from 2% to 10 % is sure to exploit and rake in at least $218 million over nine months. Additionally, the introduction of a broad-based foreign exchange commission on all sales of foreign currency at a rate of 2% via all wire transfers, credit card transactions, and over the counter sale of foreign currencies will furtively compound matters for consumers. Local businesses and households must also provision for an increased excise tax on gasoline and diesel, on top of a five fold increase in the NSRL while still attracting a 17.5 % Value Added Tax (VAT). Barbadians know all too well the cumbersome impact of cumulative energy costs on the local labour and prices market, particularly after having endured years of uncertainty and volatility. In total, more than 540 million dollars are expected to be voraciously extracted from tottering taxpayers over the next nine months.
Effectively, Stuart’s harsh policy measures and Sinckler’s punitive tax impositions will cause greater consternation across households and, the private sector will likely have to cut job losses or bend to more underemployment. President of the Barbados Chamber of Commerce and Industry (BCCI) Eddy Abed warned that the potential for job losses has increased with Sinckler’s taxation journey despite the ‘restraint and maturity exhibited by the private sector’ in the last decade. Leader of the Opposition, Mia Mottley correctly describes Sinckler’s heartless grab for greater taxation as the “most vicious tax take” ever to be inflicted on Barbados since 1941.
Barbados Manufacturers Association (BMA) President Jason Sambrano lamented that “people will spend less, there will be less economic activity for businesses” and issues of competitiveness will become more pronounced than currently exist. Removed from Sinckler’s thought is that local and foreign firms together with households will paralyzingly suffer a compounded rise in doing business. Domestic consumers will face at least a 10 % and more likely a 15 % rise in inflation while writhing in an onerous cost of living. The predicament for the nation is that Sinckler’s thoughtlessness will indisputably challenge the quality of life and standard of living in Barbados, while keeping at bay the international business sector and the accompanying investments. If things were already painfully hard, they will become practically unbearable for the nation.
It should serve the Finance Minister and members of the governing elite to realize that a tax policy should ‘acquire a high legitimacy and broad acceptance’ among our citizens because such legitimacy ‘requires a general feeling’ that the implemented tax policy serves the people, ‘relative to their contribution’. There must be the admission that Sinckler and his policy choices are unconscionable. The DLP continues to be extremely hostile and repugnant to the very people that its parliamentarians are supposed to represent. Untold burdens will realistically strangle Barbadian men, women, and children.
Most citizens and residents of Barbados are already reeling at the horrible decisions being made at a time when there ought to be a stimulation of economic growth. For instance, numerous persons sadly teared up last week after listening to a female caller to VOB’s popular call-in programme – Brass Tacks. Barbadians heard the wailing cries of a woman keen to get on with providing for herself and family, but she was up against the crass tax increases announced by a miscalculating and possibly uncaring Finance Minister. Barbadians having heard the hurting woman’s wails for fairness and have taken to social media showing an empathy that eludes Sinckler. These individuals firmly believe that the over-taxation by the DLP administration has left them feeling outside of the loop and not being serviced in juxtaposition to their contributions and sacrifices.
To date, Barbadians have experienced rapid pauperisation and seen many dreams flushed. Without preaching any ‘doomsday scenarios’, Minister Sinckler often appears dismissive of his critics, indifferent to advice, and pompous even in circumstances where the results of his macroeconomic determinations produce increased pain and suffering for the masses. Equally foreboding is the invidious silence and callousness of Prime Minister Freundel Stuart. There has been widespread disenchantment with the many incredulous promises made by Stuart and his despicable Cabinet. Having allowed several opportunities to slip through his grasp, Stuart is perceived to find solace, mainly in the classics, history and mythology but forgetting that Barbadians must daily face the real world. To the extent that Prime Minister Stuart can ignore the calls for him to exude empathy or intervene in the obvious decline of things social and political, is clearly indicative of a man seethed in his dour oblivion to the pioneers that charted the socioeconomic development of Barbados.
The Prime Minister has belatedly commented that the July 1st implementation date for the brutal taxation was ‘deliberate’ because he and his useless Cabinet “wanted to hear what people thought might be some of the challenges they were likely to face.” With all due respect, Stuart’s seeming contortion is as pathetic and reprehensible as the spineless acceptance of two outspoken Ministers critical of the very budget and taxation torture. Moreover, Prime Minister Stuart crudely mocks Barbadians by saying that there is still “time to listen and to make any minor adjustments that need to be made to facilitate those persons who will be affected by the 2 % commission.” Pray tell Barbadians, was Mr Stuart sleeping throughout Cabinet and during the debates?
Regrettably, there is no hope or outlook for real progress under this cadre of DLP parliamentarians and Cabinet. Despite the tremendous sacrifices made by the Barbadian people for almost a decade of setbacks and shabby governance, the nation is still suffocating under the deluge of Sinckler’s mess and Prime Minister Stuart’s lethargic leadership. The fact that Minister Sinckler asserted that ‘this is a time for strong, determined and unflinching leadership’ does two things. Firstly, by implication, Sinckler admittedly condemns Freundel Stuart for not being the type of leader capable of resuscitating the nation and political economy at this juncture. Secondly, Sinckler’s repeated statements on leadership, point toward the recent and many failures (i.e. over the last nine years), recognizing that the status quo inclusive of his tragic prescriptions must be uprooted. Surely, Sinckler – like numerous Barbadians – is calling for a new mandate so that once again Barbados obtains a legitimate government that is expressly derived from the power of the people.
Barbados is stuck in the economic doldrums, and for the next few months with Sinckler’s carelessness and Stuart’s indifference. The Cabinet is blind towards the plight and suffering heaping down on Barbadians. Looming at Barbados’ doorstep are ominous forebodings inclusive of additional downgrades, devaluation, and disintegration of the society. Already, the people – the human capital – are perilously close to totally breaking under the tremendous pressures of mounting debt and heavy taxation. As Milton Friedman argues, “higher taxes never reduce the deficit; governments spend whatever they take in and then whatever they can get away with.” It is time for Barbadians to stop this DLP government. Everything is logical and right with the national call for immediate general elections.