Too Much Voodoo

grenville-phillips

Submitted by Grenville Phillips II,

The year 2020 was my year for playing shots – using Clyde Mascoll’s recent cricket analogy. This was to be the year of making significant investments, all of which would have benefited Barbados and Barbadians. Then Clyde got in the way.

Like so many other Barbadians, I have a mortgage. The only benefit of a mortgage is that it allows you to occupy your house about 10 years earlier. For that privilege, you get to pay the bank a lot of interest.

The amount that you borrow is called the principal. The amount that you repay is about 2.5 times the amount that you borrow. Therefore, if you borrowed $500,000, you get to repay the bank about $1.25M over 30 years.

The amount that you repay the bank, over what you borrowed, is called interest. The interest is about 1.5 times what you borrowed. So, if you borrowed $500,000, then you must repay the bank the $500,000 you borrowed, plus 1.5 times that amount, or an additional $750,000 in interest.

The amount paid to the bank during the first 10 years is almost the same as the amount you borrowed. While most of the amount you pay during the first 10 years goes towards the interest payments, some goes towards the principal.

If you had a responsible employer, then you likely have a retirement savings plan with an insurance company, or a bank. When you reach 55 years of age, the retirement funds must be paid to you. I encouraged persons to use those funds to pay the remaining principal, rather than paying interest for the next decade or two.

Over 5 years ago, I started warning people that the DLP would try to tax our retirement savings. By that time, they had taxed everything that could be taxed, and retirement savings was perhaps the only thing left. So, I tried offering economic growth proposals that did not require additional taxes.

Trying to get anyone to listen to economic growth plans 5 years ago appeared to be impossible. The national: accounting, economics, banking, and business organisations seemed to have only one aim – to get the DLP out of office, and the BLP in. The Chamber of Commerce actually passed a regulation to prevent me from sharing our economic growth plan with their members. That regulation is still in place – but only for me.

Even the DLP would not listen – they seemed to have the same agenda. So, one year later, our economic growth plan was published for public scrutiny, and Solutions Barbados was formed to contest the general election, and implement the plan for the benefit of the public.

If families could pay off their mortgages early, then everybody wins. Families would have significantly more disposable income to ‘play shots’, the government would reap the tax benefits of that additional spending, and banks would need to compete for short-term business growth loans – or go under.

During the general elections, I was on a panel with Clyde, where he told the audience that our plan was ‘voodoo economics’. So, we provided our anti-corruption, quality management, low-tax economic growth plan to individual economists and accountants, and received a very favourable report.

The independent expert confirmed that we could achieve $1B in surplus during our first year, without borrowing, laying off a single public worker, or reducing salaries. He further noted that all political parties pushing high-tax austerity needed to review our plan.

After the general elections, Prime Minister Mottley, to her credit, acknowledged that the BLP did not have all the answers, and instructed her party that all ideas must contend. But Clyde would not. The BERT leadership publicly admitted that they never looked at our economic growth plan, and dismissively noted that they would never look at it.

Last week, BERT signalled that they had failed miserably to grow the economy. All they had to show for the past 20 months is: severe austerity, high taxes, zero economic growth, and arrogant public relations to hide their gross incompetence.

Last year I reached 55 years – but it was too late for me. The clown car had rolled up the year before, and Clyde and company tumbled out – and started performing tricks. They did what I was warning that Sinckler would do – but wisely chose not to. They confiscated much of my retirement savings, and passed a lunatic law to make that theft legal.

Mercifully, they left me with just enough that I could still pay off the mortgage, and start playing shots this year. But that was too much voodoo for Clyde. So, they decided not to release all my money until 2033. They have now entered the comedy phase of their routine – telling us to ‘play shots’. With what Clyde, with what?

Grenville Phillips II is a Chartered Structural Engineer and President of Solutions Barbados. He can be reached at NextParty246@gmail.com

356 thoughts on “Too Much Voodoo


  1. GRENVILLE

    Do you think that THE ELECTORATE WILL VOTE FOR A MAN THAT PROMISES SOLUTIONS FOR BARBADOS WHEN THEY KNOW THAT HE HAS NO SOLUTIONS FOR BARBADOS?


  2. @ next party 246

    What I suggest is you take all the postings from Myself, Artax and all the others who have asked questions and tried to guide you, to an accountant and ask him to explain to you how it all works.

    I don’t need anyone to explain to me something i deal with daily.

    I now consider this matter is now closed, as we can clearly get no where based on actual working principles and their real world applications.


  3. You need to answer the question – why is VAT an unfair tax when it captures all those who have money to spend and those who spend more pay more. Those who spend more generally make more. It even captures the tax evaders, the self-employed, ensuring that they at least pay some contribution for the services they use daily.

    Fairest tax there is. And it actually should be easier to collect. There can be no fiddling of the books or fancy footwork.


  4. TheO:

    The article you referenced was useful. However, it did not address the unfairness of VAT applied in Barbados. I will give two examples.

    Not all businesses pay VAT. It used to be that if you were making $60,000 per year, that you had to register with the VAT office and pay. I think that the rate was 15%. This meant that if your annual sales were $50,000, then you got to keep your prices the same. However, your competitor, who had annual sales of $65,000, had to increase the cost of his items by 15%. That harmed businesses just above the threshold.

    The Government tried to solve this unfairness by increasing the threshold limit for registering to $80,000. But that gave businesses below that new threshold an unfair advantage, since they could charge 15% less than their unfortunate competitors. The limit is now above $200,000, but the results are the same.

    Another unfair aspect of the VAT is that it must be paid soon after an invoice is issued. This is not a problem with merchants, since they are normally paid on their invoices, and can simply turn over the VAT component to the Government.

    There are many businesses that send out invoices, and do not get paid for 3 to 8 months. These may be material suppliers, professional services, and contractors. A contractor may issue an invoice for $1M. He then must pay VAT of $175,000 to the Government from his cash-flow, thus putting the construction project in jeopardy.

    I hope that you can appreciate how unfair our VAT truly is.


  5. Gp2

    you are taking two different things that john A said and confusing yourself.

    if you go back to his first calculation – he is showing that a 10% tax rate on ALL SALES (AS APPOSED TO THE CURRENT TAX ONLY THE PROFIT) of a company in Barbados will soon bankrupt the company because currently the companies profit margins are too low (4%)
    YES , in this scenario government will taking more revenue — BUT THE BUSINESS WILL SUFFER/GO BANKRUPT/OUT OF BUSINESS —- BECAUSE THEY WOULD BE MAKING LOSSES
    10% SALES TAX. 10% SALES 10% SALES TAX. 10% SALES TAX 10% SALES TAX

    In youR second complaint
    John A is showing the effects of ONLY REDUCING THE VAT TO 10% —- this will cause a drop (43% ACCORDING TO A) in government revenue.
    10% VAT 10% VAT10% VAT 10% VAT 10% VAT 10% VAT


  6. WAITTTTTTT hold up!!!!!

    The business can recoup the 10% sales tax by increasing prices by 10% – this part no one touched on not even GP2 or his poochlicker.


  7. @John2, your 12:07 AM suggests that you are as unprepared as @Phillips! Practically every tax is passed on to the consumer so why your apparent eureka.

    That’s NOT the issue… nor frankly the 4% profit discussed above…. yes, the consumer would be forced to pay a minimum 15% upcharge (the tax and the increase to cover the profit margin requirement)… but we still need to see ‘how it changes the tax revenue streams overall!

    Mr Phillips should NOT be presenting stetile ‘what if’ scenarios on taxation to us at this stage of his political life…. his scenarios should be based on definitive examples of samples of real family projections (at poverty level, civil servants at low, mid, high salary levels, the self employed mechanic etc etc); companies at diffetent revenue levels and so on…. all to give a firm perspective of final economic numbers…. not some whimsical $1 billion fantasy!

    That is freaking BASIC debate data for anyone purporting to change the ENTIRE tax structure of the nation… and we give this gent all this bandwidth to talk this bariffle of BS rather than DEMAND the basics.

    Nonsense!


  8. “Let us start there, because if you think that businesses will pay 50 times more, then your question makes no sense.”

    @ nextparty246

    I’m at a loss.

    What question are you referring to?


  9. Lawyers also do courses in book keeping, that does not make them book keepers. Some training doctors only spend a few hours on nutrition, but when qualified they set themselves up as nutritionists.


  10. There are newspaper columnists that do one or two courses in economics and bookkeeping. Though that does not make them economists or bookkeepers, in their minds it does. They then come out pretending they know more than economists and bookkeepers.


  11. @ nextparty246 February 17, 2020 10:35 PM
    “The article you referenced was useful. However, it did not address the unfairness of VAT applied in Barbados. I will give two examples.
    Not all businesses pay VAT. It used to be that if you were making $60,000 per year, that you had to register with the VAT office and pay. I think that the rate was 15%. This meant that if your annual sales were $50,000, then you got to keep your prices the same. However, your competitor, who had annual sales of $65,000, had to increase the cost of his items by 15%. That harmed businesses just above the threshold.”
    ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

    Neither do all businesses/commercial entities have to pay corporation tax; either by law or by treaty.
    Are you going to bring them into your proposed 10% all-embracing tax net?

    Some goods/services produced and sold (like water) are specifically exempt from both VAT and corporation tax.
    Is it your intention to make Bajans pay 10% on their water supplied by the BWA including those who currently depend on the standpipe for their daily requirements?

    Neither have you addressed (ad nauseam ad infinitum) the application of your 10% across-the-board Sales Tax (with No deductions or exemptions) to the forex earning sectors such as International Business and the Hotel & Tourism industry.

    Would you still operate the Customs & Excise system of bonding goods?

    Would you be imposing your 10% sales tax on goods manufactured or ‘repackaged’ in Barbados for export?

    What about on the locally-grown agricultural produce such as yams, sweet potatoes and fresh vegetables highly recommended as a way to save forex and in the on-going fight against the fast expanding epidemic of the NCD plague?

    Can we ask your permission to get your sidekick in PR stupidity the “Freedom Croaker” to be the chief spoke-person on economic and financial matters for SB?


  12. re Can we ask your permission to get your sidekick in PR stupidity the “Freedom Croaker” to be the chief spoke-person on economic and financial matters for SB?

    WHAT SIN HAS THE BLOGGERS COMMITED THAT THEY SHOULD BE SENTENCED TO SUCH PURGATORY , SIR?
    BETTER TO HAVE DOMPEY


  13. With the elimination of corporate taxes and reducing VAT to 10 % will cause a bigger deficit – even if the businesses recoup the 10% sale tax by raising prices 10%

    DPD . you are correct. my senior moment hit me in the middle of the night but I was not going to come back on pc to admit it.

    the lost of revenue to government( by the elimination and reduction of the two taxes) will be made up by pulling those that are currently tax exempted into the tax net – form paying 0% to paying 10% – AN UNWISE POLITICAL MOVE.
    GOOD LUCK TO SB WITH GETTING THOSES VOTES.


  14. @ David.

    The last I heard was that Amazon does not act as a tax collector for and country other than the USA.

    This move by government is nothing but another example of proof that their tax collection systems at the port of entries are poor. You just forgave $400M in VAT and you worrying about a dress old Mrs Browne bought in for $19.95 USD?

    Behave wunna self do.


  15. @ David.

    Just read in Bdos Today that AMAZON will SOON be collection the VAT that we can’t work out how to collect here. There has been no explanation given how this will work though and what measures will be put in place to avoid double taxation when the items land. In other words would we need to submit the AMAZON bill say with a customs entry to avoid paying it again?

    I would say worry about it if and when it ever materializes. It is a waste of time anyhow as they are so many ways around it that it’s laughable.


  16. I would say worry about it if and when it ever materializes. It is a waste of time anyhow as they are so many ways around it that it’s laughable.

    I suspect that “it” has materialized.

    I am here waiting, almost two weeks now; for some items bought on Amazon that have disappeared into the black hole call “Customs”. 2-3 days late was the norm before.

    If this is how it’s going to be now, then I will have to make some adjustments.


  17. @ F.M Luder

    Check your Amazon bill and see if it has withheld charges on it. It probably doesn’t so you probably got clearance issues with who you ship through. He may be one still struggling with the new Asicuda software.

    I bought an item yesterday on Amazon and they were no tax charges behind withheld of 17.5% so it hasn’t started yet it would seem. Besides we still have to be told how it will work here to avoid double taxation at clearance.


    • @John A

      If you read the same BT report it refers to Amazon issuing a tax compliant certificate. One presumes on presentation of same no further taxes will be demanded onshore.


  18. @ David.

    Well you will still have the duty but at least vat registered companies will be able to reclaim the VAT.

    The thing is the application of VAT is at the discretion of Amazon. So let’s say I pay for an item on my card but it’s sent to my son in Florida for use there, why am I paying the VAT in Barbados?

    Now if you tell me they will charge AND SHIP TO the card owner in Barbados that I could understand.

    Anyhow I guess Amazon will do it Fairly and no doubt post the options of paying through other sources on their sight..LOL

    As usual high on fluff and short on details.


  19. @de pedantic Dribbler February 18, 2020 1:23 AM “Mr Phillips…his scenarios should be based on definitive examples of samples of real family projections (at poverty level, civil servants at low, mid, high salary levels, the self employed mechanic etc etc);”

    But then the real families at poverty level, civil servants at low, mid, high salary levels, the self employed mechanic etc etc. would realize that Solutions Barbados solutions are not in their best interest, and they might not vote for Solutions Barbados…And then where would Solutions Barbados be?


  20. nextparty246February 17, 2020 10:35 PM

    TheO:

    The article you referenced was useful. However, it did not address the unfairness of VAT applied in Barbados. I will give two examples.

    Not all businesses pay VAT. It used to be that if you were making $60,000 per year, that you had to register with the VAT office and pay. I think that the rate was 15%. This meant that if your annual sales were $50,000, then you got to keep your prices the same. However, your competitor, who had annual sales of $65,000, had to increase the cost of his items by 15%. That harmed businesses just above the threshold.

    The Government tried to solve this unfairness by increasing the threshold limit for registering to $80,000. But that gave businesses below that new threshold an unfair advantage, since they could charge 15% less than their unfortunate competitors. The limit is now above $200,000, but the results are the same.

    Another unfair aspect of the VAT is that it must be paid soon after an invoice is issued. This is not a problem with merchants, since they are normally paid on their invoices, and can simply turn over the VAT component to the Government.

    There are many businesses that send out invoices, and do not get paid for 3 to 8 months. These may be material suppliers, professional services, and contractors. A contractor may issue an invoice for $1M. He then must pay VAT of $175,000 to the Government from his cash-flow, thus putting the construction project in jeopardy.

    I hope that you can appreciate how unfair our VAT truly is.

    +++++++++++++++++++++++++++++++++++

    Soooo… what will your 10% Sales tax across the board do to very small businesses whose prices are usually higher than larger businesses who can make money due to volume?

    All your other complaints have to do with the administration of VAT and can be fixed by greater efficiency.


  21. @John A February 18, 2020 11:53 AM

    My Amazon’s invoices have always included an “Import Fees Deposit” charge. This is separate from the “Shipping & Handling” charge.

    Yes, the invoice doesn’t show VAT, but “Import Fees Deposit” is rather vague and should arguably cover it, no? Well that is what I always assumed given that the deposit is about 40%

    Oh well, there goes another nail in the ease of doing business coffin.


  22. @ donna

    That comment also is nonesence. The small business who sell under $200,000 are at a serious DISADVANTAGE AS they must swallow ALL the input VAT and hence they CAN NOT compete with larger producers who can reclaim all of their input vat. This was a concern also made clear by the head of the SBA.

    Lord will this foolishness ever end!


  23. @ F.M Luder.

    If we go by the article on Barbados Today it says the taxation of VAT will not start till April. So We will have to see what the bill will show then.


  24. @John A February 18, 2020 12:04 PM

    Anyhow I guess Amazon will do it Fairly and no doubt post the options of paying through other sources on their sight..LOL

    Amazon has an option to pay locally, but it is a hassle for me. I would have to leave home and go to an agent to pay. Heavy traffic, long lines and all that jazz. Just to avoid paying 17.5%.

    You either pay or stop shopping. A win-win for the Government.

    @John A February 18, 2020 12:24 PM
    Agreed.


  25. The small business who sell under $200,000 are at a serious DISADVANTAGE AS they must swallow ALL the input VAT and hence they CAN NOT compete with larger producers who can reclaim all of their input vat.
    +++++++

    Got that right.
    Customers don’t care about that. “Mr Big selling it for $XYZ so you have to match him or I leffing you things pon you shelf”

    Then some got the gall to claim that the “Amazon Tax” will level the playing field. Them really meant; flatten the competition.
    Dog bite yuh!


  26. Yes it is another expense to the small unregistered vat operations selling under $200,000. When sinkler moved the threshold to $200,000 and all of them were in there thumping the table like it was a great thing for small business, all they confirmed to Bajans is that not one of them understood how VAT really works!


  27. @ David.

    Yes Sinkler said the amount he was collecting from so many small accounts wasn’t worth it. He did not stop to think how this would affect the SBA as he deemed them “nuisance accounts” as the bank called them too. Then look at what happened we ended up forgiving $400M in VAT from these so-called “worthy accounts”.

    Also how do these small businesses get to grow to bigger business with such a hurdle in front them, or are they destined to stay small by the state?


  28. “I would say worry about it if and when it ever materializes. It is a waste of time anyhow as they are so many ways around it that it’s laughable.”

    got that right, only a fool would pay VAT to Amazon when the same government wrote off 1 BILLION DOLLARS in VAT that their tiefing business friends stole from Bajans…steuppss…people already know how to get around that..let them and Amazon wait for that money…lol


  29. Amazon Tax not affecting regular online consumers
    Daveny Ellis Created : 18 February 2020
    Barbados News
    Amazon retail

    Amazon retail

    One Senator is striving to put to bed fears about the supposed new Amaxon Tax, as local Amazon shoppers got up in arms on social media especially Twitter.

    First of all, the ‘W’ in Amazon W Service stands for Web not World as portrayed in another section of the media today.

    Many Barbadians were and still are puzzled by the rumors surrounding the government’s proposed “Amazon Tax” even hours after some persons in economics have tried right the wrong.

    Bajans had already been informed of the impending legislation which sought to collect Value Added Tax (VAT) on purchases made from online international retailers such as Amazon and Ali Baba.

    Some Barbadians were unsure as to if the legislation would affect regular online customers of Amazon in the coming days.

    Meanwhile, it was reported earlier in another section of the media that the retail giant Amazon had supposedly informed its customers that effective March 1, 2020, “Amazon World Service (AWS)” would begin to charge Value Added Tax (VAT) at a rate of 17.5% to Barbadian customers.

    This was supposedly conveyed in an email correspondence showcasing that Amazon’s new policies for Bajan customers were actively following the Barbadian legislation.

    The particular medium also reported that tax-compliant invoices were set to be issued to Barbadian customers from April 1 of this year and customers whose records indicate that their Billing Address or contact address is in Barbados are the ones who had received this email notification.

    In the hours since the story dropped, many Barbadians took to criticizing the move as another undue tax on the public by this new administration. Some immediately questioned the validity of the claim that the coming policy would affect Barbadians who are regular online shoppers of Amazon.

    However, on further investigation, it was noted that the reported story claimed that “Amazon World Service” had sent out the notice but in contacting Amazon’s tech response team, customers were told that the legislation was specific to users of “Amazon Web Services” and not on consumer products.
    Attempts to get direct clarification from members of the Ministry of Finance for comment came to no avail up to news time.

    But, Senator Dr Crystal Haynes took to the social media site Facebook to attempt to clear up any misinformation that may have been spread to the public. In response to a direct question on the matter on her post, she emphatically stated that what was posted by the media house which “broke the story” was “not consistent with the policy or legislation.”

    She went on answering many questions as well as attempting to reassure others by detailing how in fact overseas purchases are taxed for customers who intend to use them on Barbadian soil or ship them to Barbados and are taxed via customs.
    “To be clear, VAT is ONLY applied on goods and services consumed or accessed locally…Additionally, once VAT is paid upfront for your online purchase you will have an electronic copy of your receipt which reflects that your payment has already been made. You will not be charged VAT again on arrival of the goods unless a charge is due in relation to shipping cost or something unrelated to the actual transaction made for the purchase.” – Senator Dr Crystal Haynes.

    http://www.loopnewsbarbados.com/content/amazon-tax-not-affecting-regular-online-consumers

    I really doan noh wuh fuh seh!

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