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 comments

  • The Objection Grenville was addressing was the Corruptness of Government and their Insatiable Appetites for Taxes the Expence of people, where you work for the Government and all your Labour is to Pay the Government…THAT IS CALLED BEING MODERN DAY INDENTURED LABOURERS WITHOUT A RELEASE DATE!

    PTL IS MAKING A POINT BUT DELIBERATELY MISLEADING OTHERS, he is trying to say that you are going to end up paying the Tax but people pay all taxes. Government do not pay Taxes they Collect Taxes from people. Even when they pay Civil Servants and give them a raise they raise the taxes on Gasoline and Everybody pays including the Civil Servants.

    GOVERNMENTS FEEL IT IS THEIR SACRED DUTY TO TAX PEOPLE TO HELL! THEY WILL ALWAYS DO THIS UNLESS WE SAY ENOUGH IS ENOUGH.

    The more we say that the Government should do this and the Government should do that and the more we want Government to do things for us…Gives them the Execuse to tax us more…GOVERNMENTS DO NOT MAKE MONEY THE SQUANDER MONEY , OUR MONEY. It is like a man telling you, I am going to give you Free Everything and then he says Give me aaaall the Money you got now and what ya going work for and then gives you a little somethings back, saying we out of money. SO YOU STILL END UP WITH A PROMISE AND BRECK!

    Whereas Previously with money in my pocket and could have made a decision what I want to Buy Now, what I will try to Buy later and if I want to put down some for a Rainy Day. The Difference is that I make my Decisions about what is in my pocket. Other than that Government Takes what is in your pocket, while you are left Breck and without a release Date and Beholding to the Civil-masters.

    LET YOUR VOICES BE HEARD LOUD AND CLEAR, Civil Servants work for the people not the other way around. The power is in Our Hands; we can prevent them from becoming the Civil-master!

    WHY SHOULD WE DESIRE ECONOMIC SUICIDE? The Have made us All Hopeless that is why some Desire the Financial Suicide by calling for More Government like PLT AKA Peter Lies Taxingly!

    Like

  • Boy, ain’t it nice when i don’t have to TAX my brain to respond to Grenville’s Voodoo or David Copperfield Economic and Fiscal policies! Despite studying the subject matter years ago, it is not my favourite thing and so I cannot fly out of the starting gate like some of you here. I would have to wade through and figure it out step by step. Much like the Bible.

    But I can surely follow your submissions without any lag time and it’s not looking to good for the $1b surplus without layoffs at all.

    Wuhlaus!

    Like

  • That should be too good not to good.

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  • @ Hal.

    I ain t going there. LOL

    plus I doubt them sales would show in the financials!😊

    Like

  • @John A

    There is room for GEL to rationalize its operating model.

    It should be stated GEL is known to be a reputable company.

    Like

  • @ David.

    The reason i picked GEL is because they are one of the best diversified companies in the region with a consistent history of profitability yearly. They have also plowed a considerably amount back into the company in the way of retained earnings. If a company that has done all of this is fighting to get 4% of sales in net profit, can you imagine how tough it is for the smaller under capitalised businesses?

    To be honest Barbados does not have a bad tax plan, where we fail miserably however is that our tax collection itself is piss poor as the $500M in vat forgiveness confirmed. We don’t need new taxation what we need is better tax collection.

    Liked by 1 person

  • Dear All:

    To avoid discussing semantics, you can think of our plan as abolishing VAT and corporation tax, and replacing both with a sales tax of 10% on actual revenues/fees.

    VAT is a grossly unfair tax. The current corporation tax is also grossly unfair and easy to avoid paying. A sales tax is fair since all competitors have to pay it.

    Our income tax proposal is 10% of actual income with no deductions.

    It is possible to run well-managed public services at approximately 5%. However, we started at 10% to be conservative, and it was easier for most people to calculate.

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  • Is it true that three of the new shiny garbage trucks has out of commission waiting for parts to be have them repaired
    What a ting doah

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  • @ next party 246

    What I pointed out is not semantics but reality. So let me make it as simply as possible for all to understand with the below example.

    NOW:

    Company sell $ 10,000,000 A year and makes 4% of sales in pretax profit. Company makes $ 400,000 before tax and pays tax at 5% = $20,000 in tax. Company retains $380,000 in retained earnings for expansion.

    246 growth plan.

    Company sells the same $10,000,000 and makes the same pretax of 4% as above hence makes same $400,000 pretax. 10 % of its gross sales in a final tax is 10% of $10 million in sales =$1,000,000 in taxes. Subtract the $1,000,000 in taxes from the $400,000 in pretax profit and COMPANY LOSES $600,000 IN A SINGLE YEAR.

    So much for a corporate growth plan. As I said i would like to meet the accountant that recommended this! As I showed above this would shut most companies down in a single year, while making the rest unfinancable by any commercial bank.

    Facts vs political fiction.

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  • Also as you have made the tax of 10% of sales a final tax on gross sales with no other deductions. That means all depreciation cost on equipment will be disallowed. So if the above company wanted to improve its equipment say the cost of that equipment would have to be added to the $600,000 loss making improvements a thing of the past.

    As I said i want the name of the man that approve this. It sound like it could of been that fellow Sinkler that was bout here a few years back.

    Liked by 1 person

  • Semantics???? This is not about words. It is about numbers. Any first year student of Accounts with a Meigs and Meigs (if that is still in use some thirty-five years after I used it.) would rubbish this tax plan.

    Heaven help us!

    This man knows just as much about accounting as he does about the Bible.

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  • The “monkey” is up the tree with its ass exposed! Wuhlaus!

    Please note that the word “monkey’ is in inverted commas.

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  • This man knows just as much about accounting as he does about the Bible. IS TRUTH YOU AH TELL!

    REThe “monkey” is up the tree with its ass exposed! Wuhlaus! Please note that the word “monkey’ is in inverted commas.

    HE NOT A MONKEY HE JUST A CLOWN IN A MONKEY SUIT

    HE ONCE SAID THAT HE WAS A SLOW LEARNER
    MAY BE DUE TO HIS APPARENT FRONTAL BOSSING

    THESE ARE THE CAUSES OF FRONTAL BOSSING
    Acromegaly
    Basal cell nevus syndrome
    Congenital syphilis
    Cleidocranial dysostosis
    Crouzon syndrome
    Hurler syndrome
    Pfeiffer syndrome
    Rubinstein-Taybi syndrome
    Russell-Silver syndrome (Russell-Silver dwarf)
    Use of the antiseizure drug trimethadione during pregnancy

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  • That is why the word “monkey” is in inverted commas, GP. It is a common saying. it does not mean that he is a monkey.

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  • @ nextparty246 February 12, 2020 5:28 PM
    “VAT is a grossly unfair tax. The current corporation tax is also grossly unfair and easy to avoid paying. A sales tax is fair since all competitors have to pay it.
    Our income tax proposal is 10% of actual income with no deductions.
    It is possible to run well-managed public services at approximately 5%. However, we started at 10% to be conservative, and it was easier for most people to calculate.”
    ++++++++++++++++++++++++++++++++++++++++++++++++++++

    Why are you, Grenville Jr., dodging the matter of the applicability of your proposed tax regime to the international (offshore) business sector and the financial services ‘industry’?

    Would your 10% tax on “actual income” also apply to the hotel and tourism industry?

    Of course you will not respond to these queries even though they are ‘bereft’ of any personal attacks directed at you or any member of your family.

    Only goes to show you are no different to the other ‘parties’ who bluntly refused to entertain your harebrained tax plans.

    Like

  • peterlawrencethompson

    @Freedom Crier February 12, 2020 12:19 PM

    Everything you have written in this post is so pathetically stupid that it is hard to know where to start. The heart of it is that you appear to think that I’m a supporter of big government, which only shows how utterly ignorant of what my political position is. If you can find any defense of big government in anything that I have written on BU or anywhere else I will donate $100 to your favorite charity. If you fail to find such evidence and quote it here in context it will amount to your admission that you are a filthy liar.

    Your choice.

    PS Grenville now understands that his 10% flat tax proposal is “a sales tax of 10% on actual revenues/fees.” He has thereby proven that is fully capable of learning from reasoned discourse, a skill I share, but which completely escapes you.

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  • Below are some comparisons That may help to give a better idea but the subject matter is too complicated to even use this model to look at.
    When a Government collects more than what a company can make as a profit that is always a problem. Do all the work take all the risk and give what you earn to the government. Bad Idea.

    This is the Present System in Place…

    Sales including Vat $10,000,000
    Vat payable on Sale 17.5% $1,489,362
    Bought Good @40% Vat Inc. COG $4,000,000
    Vat paid on Good bought $595,745
    Net Vat paid by company $893,617 8.94%
    Profitability of Company $400,000 4.00%
    Old Corp Tax 25% $100,000
    Profit to keep $300,000
    Old way Corp paid to in direct Taxes $993,617
    New way 5% tax on profit $20,000
    Total paid under Mia Now $913,617
    New way Corp Profitability $380,000 3.80%
    Gov total Revenue Old Way @ 25% corp tax $993,617 9.94
    Gov total Revenue new Way @ 5% corp Tax $913,617 9.14

    This Example is as bad as the what we presently do

    GP2 Way No Vat No Corp Tax (Sales Tax @ 10%)
    Sales including New GP2 Tax $10,000,000
    GP2 Tax payable on Sale $1,000,000
    Bought Good @40% GP2 Tax Inc. COG $4,000,000
    Net Tax paid by company $1,000,000 10.00%
    Profitability of Company $400,000 4.00%
    Profit to keep $400,000
    Gov total Revenue GP2 Way $1,000,000 10.00%

    This Below Example is a better way as the sales tax is lower and the Corp gets to keep more of what it earns.

    GP2 Way No Vat No Corp Tax (Sales Tax @ 5%)

    Sales including New GP2 Tax $10,000,000
    GP2 Tax payable on Sale $500,000
    Bought Good @40% GP2 Tax Inc. COG $4,000,000
    Net Tax paid by company $500,000 5.00%
    Profitability of Company $400,000 4.00%
    Profit to keep(Profit + Savings from Tax) $900,000
    Gov total Revenue GP2 Way $500,000 5.00%

    Another point worth noting small business can do the paper work when the accounting is simple but once you start saying some things are vat exclusive and some are Vatable then they want and have to hire an accountant and that is an expensive proposition for a small business so simple tax like what GP2 is proposing is beneficial to all size business but more so small business.

    If the 10% sales tax were to remain other taxes would have to go to make the corps move viable. EG: Import Duties or Port Charges which Penalize all Bajans.

    In the End What will be the Best Economic Plan that will Bring Prosperity!

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  • Thanks for your examples John A. Nice and clear for us non-accountants.

    But tell me how would Solutions Barbados plan affect ordinary workers, for example those people working for $400 per week

    Those people working for 1,000 per week

    For example the two adults in household A are working for $400 per week and $600 per week respectively. They have two young children.

    And household B, both adults in the home are working, one for$1,000 per week and the other for $500 per week. Two young children also.

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  • I suspect that a flat 10% tax would hurt ordinary working class families, and working/middle class families, but I am not a numbers person, and not too familiar with taxes, except my own.

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  • Silly Woman,

    No need for further calculations.

    What would happen is that if the people work in the private sector they would soon be unemployed. And after the businesses close the government would collect less taxes and so if the people work in the public sector, they would eventually be unemployed.

    But you can wait for confirmation from John A. No hard feelings!

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  • Sometimes people who were brought up in very comfortable circumstanses have no idea how the rest of their compatriots live.

    They have an extremely unrealistic view. They do not know that many people, perhaps most people live from pay check to pay check. Does Solutions Barbados or any political party for that matter know for example how many Bajan families have cash savings of for example between $1,000-$2,000; or $4,000-5,000; or more than $10,000 etc.

    Long, long ago I remember a person who subsequently became a member of the political class saying during a CBC debate “well if people can’t find jobs, then they should go overseas and study or something” I was amazed. I suspect that the speaker had no idea that people who are not well educated enough, or well connected enough to find paid work in Barbados have very little hope of going overseas to study. How do you go overseas to study when you may not have the bus fare to go to Bridgeown for a job interview?

    People need to get real.

    Certainly when I went to work at my first job my parents bought me 2 dresses, a pair of shoes and a handbag. In order to get a third dress i had to wait a month until I got paid and then take the third dress on credit, paid down a little and paid the balance bit by bit until the debt was cleared. hose three dresses served me for a ear or two. Wear one on Monday, one on Tuesday, wash those teo on Tuesday evening and have them to wear on Thursday and Friday.

    This is how poor people live.

    Poor people don’t have what our political class have taken to calling “fiscal space” but which poor people more correctly call “I have no money”

    All of our political class have to get real. Most of us were not raised in upper middle class families with 1-3 children. Most Bajans are still not upper middle class. And let me remind everybody that it is working and lower middle class people who do most of the work of reproducing the work force. That is poor people and lower middle class people have more children, and raise more children. They are the one who reproduce the work force.

    Reproduction is WORK. It is not called LABOUR for nothing.

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  • @ Silly Woman

    The tax plan at 10% was for businesses only. We would have to look at their personal income tax plan for individuals to see what is in store for them.

    To recoup the loss on profit caused by the 10% on gross sales as a final tax, as opposed to what exist now, our companies would be forced to increase markups and that would affect all of us.

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  • Also remember that any increase in prices always affect those at the lower income level the worst. In other words if an item increases by $5 it is not felt by the person earning $5000 a month, the same way it would be by the person working for a $1000.

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  • John AFebruary 12, 2020 5:55 PM

    So much for a corporate growth plan. As I said i would like to meet the accountant that recommended this! As I showed above this would shut most companies down in a single year, while making the rest unfinancable by any commercial bank.

    Like

  • Most of us are not corporations.

    I would still like to see the tax plan for individuals.

    How would a Solutions Barbados government work for the majority of us non corporate barbados.

    How would it work for ordinary Bajan families, police constables, gas station attendants, housekeepers, sales clerks, beginning civil servants, nursing assistants.

    How would it work.For the time being, until the cheap robots come along, how wuld the Solutions Barbados solutions for those people whose labour keeps the corporations going.

    How would it work for the lady who cooks the meals for the corporate titian, for the man who does his/her garden work, the the woman who minds his children so that he/she can actually go to work, travel for the job etc. for the ladies who looks after the elderly demented parents of the corparate executives (there is not a robot yet who will mind our elderly demented parents)

    Liked by 1 person

  • @ freedom

    Your analysis is so flawed I don’t known where to start so I will just mention one issue. The vat on sales is not paid in as collected. It is netted off against the input vat.

    Finally 5% as of today’s tax rate on 4% net profit of sales of $10,000,000 = 400,000X5% = 20,000

    Plan 2 calls for 10% tax on saLes of $10,000,000 = $ 1000,000

    don’t bother to go any further as you are simply confusing issues of mark up which already factored in the net profit of 4% after expenses. You also failed to factor in operating expenses.

    Just stick to the 2nd and 3rd paragraphs and you safe as that is all that is required for a comparison.

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  • Donna

    Meet Freedom Crier
    Note that he is GP2 “pooch licker” and he only he can try to explain SB 10% tax growth plan – which even SB/GP2 is attempting to do.

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  • it said both PERSONAL and CORPORATE income tax would be reduced to 10 % of income

    Liked by 1 person

  • “This can be done by reducing taxes on personal and corporate revenues to 10% of gross revenues – with no deductions. This will make taxes easier to calculate, pay and audit. It is also fairer.”

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  • Where in this proposal isn’t it trickled down economics?

    Reducing corporate taxes and the taxes for the rich individuals while roping in those at the lower end that don’t have to currently pay taxes/ or get back a reverse tax.

    it would be the lower wages workers that make up the difference for the tax cut for those at the top.

    So who claim this isn’t trickled down?

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  • @ John A
    @ John2
    @ Donna

    Very good analysis.

    Perhaps those individuals who were annoyed because 2 or 3 contributors asked Grenville to produce the accountant’s report for perusal……. and believed they were pursuing a hidden agenda……

    …….. could ask Grenville to use your analysis, see where he went wrong and make the necessary amendments to his economic policies.

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  • All political parties including Grenville and SB realistically courting the electorate must be open to being transparent in how it engages the public. In a new dispensation this is non negotiable.

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  • @ the Sage Annunaki

    When you plan to open the College on Polemics and Syllogism?

    You said and I quote

    “…Such a proposal to completely transform the corporation tax system- which would effectively get rid of the Income Tax Act and tax accountants- can only come from the fertile imagination of a person closely connected to Don Quixote without the guidance of the level-headed sidekick Sancho Panza the Moor to keep the airhead tied to the ground of reality…”

    Heheheheh

    Heheheheh

    This is exactly why de ole man need to come to your school cause you call this wannabe politician a madman AND IN THE PROCESS, did not incur any comments from Artaxerxes the Superlative Archiver (for whom I have much respectful regard)

    @ Artaxerxes

    Have you ever found yourself among a group of people where one person, be it a family member or work colleague IS FOREVER PRETENSIVE?

    You ever had cause to speak out about something they did?

    For example, of late you have been talking about the use of the Panama Papers why?

    I mean, you ent publish the papers, nor is your name among them, yet you feel convicted to defend what you see as their abuse

    Why?

    I put it to you that there is no difference in the impartial conviction that motivates you to speak out about the Papers’ usage AND “the 3 people who talk about Granville here.

    Your focus on The Panama papers is even more of interest to us 3 cause what happened in the past, in a place few of us know about, is less important than me exposing a consummate pretender and liar Granville!

    I was hoping that I could get some classes from the Sage TO IMPROVE MY ENGLISH AND BAD WORDS BUT THE SAGE HAS NOT OPENED HIS SCHOOL YET

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  • So a gas station attendant, a gardene, a maid, a cook, a baby sitter, a nurses aide, who currently pays no income tax, and who receives a $1,300 reverse tax refund, would pay $40 per week in income tax and would not receive a reverse tax refund.

    $40 per week X by 52 weeks=$2,080 per year which the low wage worker would have to pay, in addition the low wage worker would lose the $1,300 reverse tax credit.

    $2,080+$1,300=$3,380. So a low wage worker who currently pays no income tax would lose $3,380 per year or $281.00 per month; or $65.00 per week.

    Can anybody explain to me how it would help a low wage worker to take home $65.00 per week LESS?

    We really need to stop pretending that most Bajans live in upper middle class homes with well educated well paid professional parents.

    And we need to stop fooling ourselves that poor people cannot count, and would not understanding that in spite of a 10% flat tax being easier to calculate, that they would not understand how such a tax would literally take the bread out of their mouths.

    We need to get real.

    Liked by 2 people

  • @ silly Woman

    I fraid to axe you to come by me to “assemble” anything.

    You is a woman who does eat nuff edoes and yams and ground provisions and you sound very healthy and “cougarish” in the sense of the word nowadays

    I fraid that de ole man will get unfair during the “assembly of the flat box” and, when next I come heah, and lie bout my “adventures” you only type up one word!

    Hehehehe (without the last “h” cause you is a woman) and wid dat every body get to know bout de ole man business INCLUDING FREEDOM CROAKER.

    So I gine tek my time and assemble my own tings effin you please befo’ de news reads

    “The Legend, WHILE SUPPOSEDLY BUILDING SOME WOODEN DESK, was found with a Piece of Wood in his hand”

    “He and his wood had collapsed and had to be transported to QEH to ICU.”

    “No fowl play is suspected, though the ambulance attendants indicate that, even though unconscious, Piece had a big smile on his face and was murmuring the words “Silly I want a piece more” all the way going down in the Ambulance”

    No one was found at the house and the doors were closed

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  • Seeing as how this is a joke blog, think it appropriate to borrow from,the Joker who famously said –

    ” I have found a name for my pain, and it is Batman!”

    Well…. I have found a name for this pain and it is Fiscal Flatulence!

    Wuhlaus, Piece! The Emperor has no clothes on and he farting freely.

    Murdah!

    All this voodoo economics got me thinking about other African religions and a Caribbean man of real excellence whose brilliance I have revelled in since childhood.

    I feel better now.

    Like

  • I wish you a speedy recovery. Lolll!!!

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  • Goosebumps!

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  • All that talent and so handsome too!

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  • re No one was found at the house and the doors were closed

    PIECE ARE YOU SAYING THAT AFTER SS RUN YOU AGROUND SHE WENT IN SHE GROUND?

    HEADLINES SHOULD BE

    PIECE HAS A WEAKNESS FOR SWEETNESS AND DROWNED IN THE SYRUP

    DR SAYS HE COMMITTED SUICIDE………..MURDER

    Liked by 1 person

  • @Artax

    As I said above any plan is worth looking at but we must review it without prejudice and based on financial reality and real world application.

    Many of us on reviewing BERT said it had nothing in it to promote growth and were called DLP supporters etc. Now 2 years later the fact that no growth occurred has been confirmed by the central bank governor and others.

    Many may cuss this blog but at least here we refuse to drink Koolaid and ask for more.

    Liked by 1 person

  • Here’s one i had forgotten!

    “If nothing go wrong cost of living bound to come down!”

    Like

  • @Donna

    Lol haven’t heard those songs for years!

    Life without laughter is pointless.

    Liked by 1 person

  • And since Piece, Silly Woman and GP are intent on being “wicked”-

    Like

  • John A,

    I am always looking for a laugh.

    Liked by 1 person

  • Donnnnaaaa. Behave do. Nenwood Dick??? Lolll!!!

    Liked by 1 person

  • CORRECTION: Benwood

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  • Silly Woman,

    See how skillfully he writes! I sang that song as a child and had no idea what it was the man had fuh she.

    Liked by 1 person

  • Now i know why our parents tried to prevent us from singing banja.

    You remember when calypso was considered banja?

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  • My parents had all the records and NEVER tried to stop me from singing banja. My father played guitar in a band in the hotel circuit as a young man for fun.

    Besides, they knew I hadn’t a clue.

    Liked by 1 person

  • This is what happens when the dumb reduce themselves to asswipes for stinking politicians.

    https://www.theguardian.com/politics/2020/feb/13/sajid-javid-resigns-as-chancellor-amid-boris-johnson-reshuffle

    “Sajid Javid has resigned as chancellor after Boris Johnson asked him to sack all of his advisers in a move by No 10 to seize control of the Treasury.

    Javid has been replaced by his deputy, Rishi Sunak, the chief secretary to the Treasury, who is a favourite within No 10.”

    Liked by 1 person

  • RE John A February 12, 2020 11:14 PM “@ freedom…”

    YOU WERE TRYING TO LOOK AT THE PROFITABILITY OF A CORP IN ISOLATION WITHOUT LOOKING AT TOTAL GOV REVENUES AS A COMPARISON.

    I HAVE INCLUDED SOME MORE TEXT SO YOU CAN UNDERSTAND IT BETTER.

    Sales including Vat $10,000,000
    Vat payable on Sale 17.5% $1,489,362 Output VAT
    Bought Good @40% Vat Inc COG $4,000,000
    Vat paid on Good bought $595,745 Input VAT
    Net Vat paid by company (input-output) $893,617 8.94%
    Profitability of Company $400,000 4.00%
    Old Corp Tax 25% $100,000
    Profit to keep $300,000
    Old way Corp paid in direct Taxes $993,617 Add Net VAT and 25% Corp Taxes
    New way 5% tax on profit $20,000
    Total paid under Mia Now $913,617 Add Net VAT and New Corp Tax
    New way Corp Profitability $380,000 3.80%
    Gov. total Revenue Old Way @ 25% corp. tax $993,617 9.94% Net VAT and 25% Corp Taxes
    Gov total Revenue new Way @ 5% corp tax $913,617 9.14% Net VAT and New Corp Tax

    The Cost of Good is included so as to get an idea of the input Vat
    The output Vat is on the $10,000,000.00 sales
    Of course you have to net off the vat but what is left still is an expense to the company as Vat payable

    GP2 Way: No Vat, No Corp Tax. (Sales Tax @ 10%)
    Sales including New GP2 Tax $10,000,000
    GP2 Tax payable on Sale $1,000,000
    Bought Good @40% GP2 Tax Inc COG $4,000,000
    Net Tax paid by company $1,000,000 10.00%
    Profitability of Company $400,000 4.00%
    Profit to keep $400,000
    Gov total Revenue GP2 Way $1,000,000 10.00%

    In order to look at the Governments Revenue you have to compare Apples with Apples
    As you can see the GP2 way of 10% sales tax is still high so look below at the next suggestion of 5%

    GP2 Way: No Vat, No Corp Tax. (Sales Tax @ 5%)
    Sales including New GP2 Tax $10,000,000
    GP2 Tax payable on Sale $500,000
    Bought Good @40% GP2 Tax Inc COG $4,000,000
    Net Tax paid by company $500,000 5.00%
    Profitability of Company $400,000 4.00%
    Profit to keep(Profit + Savings from Tax) $900,000
    Gov total Revenue GP2 Way $500,000 5.00%

    This method of 5% clearly shows that the company will make more money and if the government only needs 5% to run the country why collect 17.5% Vat + Corp Tax or 10% sales tax.
    People have become to accepting of taxes almost like they love to pay what they earn to the government.
    The Government is our servants not our masters, they serve us not we serve them.
    The people on BU love slave talk as beaning appose to it but willingly accept servitude as in excessive taxes. How is that possible there is some disconnect in the mind.
    Any program to reduce taxes is good for the people. What they earn they should keep except the bear minimum to run a functioning government that works for the people not people work for the government.

    As for GP2 proposal of 5% or any other proposal that reduces taxes, I am for.
    I can spend my money better than any bureaucrats can because I will get what I want not what they deem fit that I may have, if they allow it.

    As for the ranting on BU against GP2, get a grip and if you disagree then come with alternative proposals but stop sounding like a fool with a mouth. Grow up.

    Like

  • @ freedom.

    Unlike you I support no party so that allows me to deal in facts and not fiction or window dressing. Your defence or Grenville is admirable though I must admit, even though the 2 simple examples i gave showed the system flawed. Donna and Silly Woman also went on to show where people not currently taxed would now be taxed at 10%. Did you notice that or did that slip you too?

    Anyhow carry on smartly with your prose as I don’t think David has a limit on a post at this point.

    You may have the last word my friend as I am done with this issue, as to prolong it will change nothing in the minds of those capable of independent thought. You would do well to take note of your own pictorial quote.

    Liked by 1 person

  • Dear All:

    Companies are currently paying a sales tax of 17.5% VAT. Another workable option would be to reduce VAT to 10%, but everyone would have to pay VAT. We would then abolish corporate tax and divert those ‘BRA’ resources to properly managing VAT. VAT is currently an unfair tax because every business does not have to pay.

    Which of the two do you prefer?

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  • I prefer a tax will allow those that are not currently paying a direct tax and those that are getting the reverse tax to not pay any direct tax.

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  • not only would they be paying you government 10% tax from their wages but they will then also have to pay 10% sale tax on everything else. 20% tax VAT is less at present.

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  • @ Nextparty246

    Grenville that would be a more workable option for sure. The problem we have is not so much our tax system although it could use a bit of fine tuning.

    Where we fail miserably is in our tax collection. We just forgave $500M in vat collections and then proceeded to raise $400M in New taxes. If the threshold was then lowered to $100,000 and the registration purpose made easier, the net result would be positive but we have to collect the tax and not forgive it. This would help alot of small businesses too who could then reclaim their vat inputs. RAising the threshold hurt alot of small businesses and made them uncompetitive with larger registered competitors.

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  • @John A

    Do we know how much of the 500 million was collectible?

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  • @ David

    That is a good question as we don’t know how many of the entities were out of business. Once the businesses were still in operation legislation is there for its collection. What we should of done is given it to a experienced collection agency and said “fellows collect what you can and take 25% of what is collected.” They are some companies in the UK that specialise in this type of collection.

    VAT to me Is the fairest tax as we can decide to buy an item or leave it. Properly structured it will collect from the best of tax evaders as well.

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  • @John A

    You are a sensible fellow. Your intelligence should confirm that many of the companies are cash poor.

    >

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  • @ David.

    Yes some could be victims of the lost decade so revenues would of been flat.

    The problem is that many businesses fail to accept that they are only agents for government when it comes to VAT. They pay it on input then subtract that from what they collect on their sales and pay in the difference. Problem is many have poor accounting systems, so they basically spend the MOF’s VAT on paying their bills. I would bet you many of these are years in default, so the question is why was this allowed to go on for so long?

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  • The point then is what would have been the better plan, a collections effort by government where monies due would have been undetermined and quantum would have been collected over an unknown period or the path taken. It is all academic now.

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  • @ nextparty246 February 13, 2020 8:14 PM

    The 17.5 % that we Pay in VAT is murderously high. Freedom personally thinks that the VAT and the Removal of any Perks and High Taxes on people’s salaries is a Misguided attempt to Dampen Consumption with the attendant outflows of FOREX. This has brought Barbados to its Knees. This Expansion of the Economy by 1% is not being felt because Freedom does not believe it is Real.

    When you look at Large Economies like the USA and see how Trump turned it around in a short time where they are more Jobs available than they have people wanting jobs the performance of the American Economy is Remarkable and should stand as a model as to what can be accomplished. If Caribbean Countries would open their Eyes instead of using the Blinkers of their Ideologies and Biases, the Caribbean Countries would Boom again but they keep Doubling Down on Stupid!

    If you cannot see what is in front of you and Learn how much Hope do you think there is for us? It is by the Grace of God that we have Survived until now. Freedom Prefers Reducing the VAT but Retaining the Exemption for Businesses that sell under $200.000 in fact that Level should be Increased as the Input VAT is still paid. Freedom much prefers a Sales Tax because it is simpler to manage.

    VAT is a Bonanza for Accountants, it’s like you cannot form a company unless a Lawyer signs the Papers. We have Complicated our Society so much that we have Instutionalised Revenue for certain classes of people. Freedom is Glad that Mr. Phillips is Thinking and Considering other Alternatives and it is only by Honest Discussion and Debate that we can arrive at a Fairer and more Equitable Outcome.

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  • RE John A February 13, 2020 8:44 PM @ Nextparty246

    Re “The problem we have is not so much our tax system although it could use a bit of fine tuning.”

    We DO NOT NEED a Bit of Fine Tuning we need an OVER HALL and a RETHINK

    RE “Where we fail miserably is in our tax collection”.

    That is why we need an OVER HALL we want a System that is Automatic not having the BRA INFORCE the Collection of Taxes.

    RE “We just forgave $500M in vat collections”

    That Tax was UNCOLLECTABLE because if a Business failed and they Owed Taxes, how are you going to retrieve it? Are you going to lock up your own Citizens because they Fail and most of these Failures were Caused by Government Policies in the first place.

    …RE “and then proceeded to raise $400M in New taxes”.

    Insatiable Appetites by Governments for More Taxes.

    RE “If the threshold was then lowered to $100,000 and the registration purpose made easier, the net result would be positive”

    Freedom can see you have NEVER Ran a Small Business, here you are Creating Work for a Class of people to the Detriment of the Small Business who Usually Struggle. You want him now to pay for an Accountant Class of People. You See with your Bureaucratic Eyes not with any that has Understanding of the Processes and the Burdens that is put on small Business. This is a Typical Ploy used by Large Businesses to put Burdens on small entities to STOP THEN FROM GROWING,

    RE “but we have to collect the tax and not forgive it”. This would help alot of small businesses too who could then reclaim their vat inputs.”

    The VAT Input for a Small Business is Just a Cost of his Raw Materials the VAT Output which would be Higher, would be a BLOW and making him UN- Competitive and Always Stuck and can Never Grow his Business because he does not Enjoy the Scale that might make him Competitive.

    RE “RAising the threshold hurt alot of small businesses and made them uncompetitive with larger registered competitors.”

    Are you Employed by Big Business to Believe such Nonsense. You Keep seeing all the Facts and Yet you do not Understand what you are Looking at. To Gain a Better Understanding put yourself in their position, it’s Called Empathy. Empathy is only a Tool that helps us to Understand but you speak like a Bureaucratic with a Top Down Solution without Knowledge and Understanding. You are Not alone Many Bright people Believe things that Ain’t So!

    Liked by 1 person

  • GP2 I don’t care about the business and rich getting a lower tax but I think you would gain more traction if you leave the current no tax payers in their current status instead of widening the tax net and including some/all of them

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  • Looka…de question was asked

    “… We would then abolish corporate tax and divert those ‘BRA’ resources to properly managing VAT. VAT is currently an unfair tax because every business does not have to pay.

    Which of the two do you prefer?…”

    AND DE ANSWER, WHICH IS PART QUESTION, IS!

    Bedroom Policeman WHICH “WE” YOUR SCVUNT TALKING BOUT?

    You see what de ole man mean bout the constancy of presenting diarrhoea jobby as coolaid after a time?

    Even John A, a brilliant accountant and aspiring economic advisor, discoursing with this “WE”!

    The one man social Gathering (an oxymoron to be sure) is seeking ideas FROM THE BEST!

    John A, mindful that you undermine your *** if you aid this Clown you would do well to *****

    ONE THING THAT WILL NOT BE ABOLISHED is the use of your deposit which, WHEN YOU LOSE IT AGAIN, will be used by the BRA to do something useful.

    It is clear the Freedom Croaker 510 is your Minister of Finance cause you Granville Phillips aka Bedroom Policeman are pulling this jackass financial policy out your ass as you go along!

    Yet, incredulously, you still claim that your original plan, and silver bullet, WAS ENDORSED BY A GHOST ACCOUNTANT WHOSE NAME YOU REFUSE TO GIVE.

    My question is, if his was the winning plan why did you react in in your post of 8.14 pm?

    You see how you are being caught out?

    LIAR!

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  • We need to stop pretending that most Bajans were raised/are being raised/live in upper middle class professional homes.

    Is you food cooked, is you home and office cleaned, is you garden work done, are your infants looked after, are your elderly demented parents looked after by upper middle class people? No.

    Then start thinking, talking, writing about all ‘o the rest ‘o we HARD WORKING CLASS PEOPLE . Because without us you could not even step out of your doors when the mornings come.

    We need to stop talking nonsense policies which exclude the majority of ordinary HARD WORKING CLASS Bajans.

    Liked by 1 person

  • @ nextparty246

    RE: “Companies are currently paying a sales tax of 17.5% VAT.”

    That is not entirely true because you’re not taking the VAT on purchases into consideration.

    Companies do not pay the BRA 17.5% on sales. So, sales for the VAT period were $200,000, the company does not owe the BRA $35,000 ($200,000 x 17.5%).

    VAT is divided into:

    (1). Output VAT, the 17.5% VAT charged on sales, which becomes an additional expense to the customer

    (2). Input VAT is the 17.5% paid on goods and services liable to VAT

    Basically, VAT is not INCOME or EXPENSE, it’s a liability. Businesses, as John A correctly mentioned, collect VAT on behalf of BRA.

    In simple terms, a company owes BRA output tax and reclaims input tax. Therefore, VAT output – VAT input = VAT payable/receivable. If the output tax exceeds the input tax, then the business has to pay the difference (VAT payable). On the other hand, if the input tax exceeds the output tax, the company can reclaim the difference as a refund (VAT receivable).

    RE: “Another workable option would be to reduce VAT to 10%, but everyone would have to pay VAT. We would then abolish corporate tax and divert those ‘BRA’ resources to properly managing VAT.”

    I suspect your use of the terms “sales tax” and “VAT” interchangeably, is causing you to confuse the issues. Your above comment does not take into consideration several companies either receive VAT refunds or collect and pay over output VAT, net of input VAT. Under the current system, corporation tax is calculated on net sales. if it was abolished, companies, in Bajan parlance, would “get out licking.”

    I could understand if you want to abolish ALL taxes……. and replace them with a sales tax.

    RE: “VAT is currently an unfair tax because every business does not have to pay.”

    Perhaps you meant to ‘say’ “every business does not” charge VAT.

    Only businesses that have annual sales above the VAT threshold of $200,000….. and VAT registered can charge VAT on sales.

    I don’t agree VAT is unfair. The administration of the tax system is very poor…… and again, as John A correctly mentioned, “we fail miserably is in our tax collection.” And, I’ll add we fail miserably at disbursing tax refunds within a reasonable time, as well.

    A business must pay VAT payable upon filing a return. But the BRA deliberately takes years before they disburse refunds.

    However, let’s look at the ‘fairness’ of VAT. Assume Mary earns $2,500 per month, which is not liable to PAYE. She purchases a case of milk for $117.50, inclusive of 17.5% VAT. Although Mary does not pay income tax, she is still caught in the ‘tax net,’ when she pays $17.50 VAT charged by the retailer..

    Liked by 2 people

  • @ Artax

    Well said and I think the VAT issue is misunderstood by many. Alot feel the VAT stays with the business where as they are only tax collection agents for the crown.

    To me the VAT if properly managed is the surest collection plan out of all. So let’s take the coconut seller that sells 2000 coconuts a week end and pays no taxes. When ever he buys diesel, bread or consumes anything he is caught there.

    We just have to tighten up our collection agencies and plug the holes in the bucket.

    Liked by 1 person

  • @ Pieces.

    First thanks for your kind words. When I say WE I speak to us as a people not to any party, cause as you know I don’t get in the party thing.

    Your research also clearly shows that BERT was intended to promote growth by using several approaches as you listed. I think politicians and party loyalist bank on the hope that all bajans have short memories.

    Liked by 1 person

  • @John A

    Have a read of the first IMF document issued when BERT was implemented. It addresses the objective of the program read stabilizing the economy and the various reforms are meant to facilitate growth. The IMF report list where focus of transformation is expected to come from.

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  • @ David.

    Yes the IMF stated that it was the politicians as Pieces showed that insisted it had growth in it. Just like the IMF spoke of growth of 0.6% and our people speak of growth of up to 1.75% for the same period. Time will tell who is right.

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  • Vincent Codrington

    @ David BU

    What does the acronym of BERT expand to? More specifically, what are R and T ?

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  • Vincent Codrington

    @ John A

    As with most policy prescriptions we need to remember exactly what they are and precisely how they should be applied. VAT is not an imposition on businesses ; it is the consumer who pays VAT. It is a tax on added value. The businesses merely collect VAT for the Treasury. They are agents. I find it amusing when they advertise that they are waiving VAT. No wonder some of them “forget”to pass it on. By extension it should not be forgiven,.

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  • @ Vincent.

    I agree with you 100%. To bring it to simple terms it’s like you giving me money to pay your water bill and instead I spend it. Then I turn around and beg for forgiveness.

    Liked by 1 person

  • @Vincent

    As earlier stated this blogmaster is not interested in acronyms but in the substance of the prescription. The read of the IMF report is very clear. You can immerse yourself in the political rhetoric if you want.

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  • Grenville’s use of the word “semantics” when John A tried to explain the difference between a sales tax and VAT indeed shows that he does not understand the concepts. Let’s see if you have succeeded where John A failed. Any first year student with a Meigs and Meigs would have grasped the difference by now.

    I say that this man knows as much about accounts as he does about the Bible. He does not understand the net effect of VAT. He does not understand what is an expense. He does not understand what is a liability. He does not understand basic accounting. He does not understand that it is the administration of the VAT that is the problem.

    This is not rocket science. Both John A and Artax have presented so simply that a CXC student could understand. I know because I tutored one once who said she did not know it was so simple. It is really simple when you have a good teacher.

    There is no magic wand to fix Barbados’ problems. There are ways that we can be fixed but it has more to do with changing attitudes, getting up off our backsides and doing the hard work and minimising corruption than it has to do with tax policy.

    Liked by 1 person

  • RE John A February 14, 2020 8:14 AM @ Pieces. “First thanks for your kind words…. ”

    Freedom was not aware that John A was an Accountant until Piece the Legion…“Even John A, a brilliant accountant and aspiring economic advisor, …”

    It even makes more Sense seeing what Freedom Contributed before Legion made that statement. Freedoms Comments clearly hit the Nail on the Head exposing the BU GURU’S intentions of Protecting and Advancing his Accountant Class of People…

    VAT is a Bonanza for Accountants, it’s like you cannot form a company unless a Lawyer signs the Papers.

    Bureaucratic BS with a Top Down Solution without Knowledge and Understanding.

    Please See…

    Freedom Crier February 13, 2020 10:04 PM
    Freedom Crier February 13, 2020 10:04 PM

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  • @ freedom.

    For all you know I might just be a shopkeeper in St Philip that could add and subtract little bit.

    The point is VAT belongs only to the state. Vat registered businesses are nothing but collection agencies of the state. Vat does not help enrich anyone other than the state. It does not help one’s sales, it does not help you get a bank loan either. It is the customers money collected by the business for the state which they must pay in every 60 days.

    Anyhow today is Friday so the little one door shop in St Philip busy, then again it may not even exist who knows……

    Liked by 1 person

  • “This is the Present System in Place…

    Sales including Vat $10,000,000
    Vat payable on Sale 17.5% $1,489,362
    Bought Good @40% Vat Inc. COG $4,000,000
    Vat paid on Good bought $595,745
    Net Vat paid by company $893,617 8.94%
    Profitability of Company $400,000 4.00%
    Old Corp Tax 25% $100,000
    Profit to keep $300,000
    Old way Corp paid to in direct Taxes $993,617
    New way 5% tax on profit $20,000
    Total paid under Mia Now $913,617
    New way Corp Profitability $380,000 3.80%
    Gov total Revenue Old Way @ 25% corp tax $993,617 9.94
    Gov total Revenue new Way @ 5% corp Tax $913,617 9.14.”

    @ Freedom Crier

    You’re WRONG….. the above information is NOT an example of the system that’s currently in place.

    You are correct re VAT on sales of $10,000,000 output VAT = $1,489,362; if purchases were $4,000,000, the input tax = $595,745.

    If the company made a profit of $400,000 and pays 25% corporation tax, the gross profit = $300,000.

    The VAT output CANNOT be calculated as ADDITIONAL REVENUE. It’s an additional cost to the customer, which the company collects on BEHALF of the BRA. Therefore, it’s a liability.

    You cannot add corporation and value added taxes (893,617 + $100,000), to subtract $993,617 as the amount of taxes the company has to pay.

    What about depreciation?

    Liked by 1 person

  • @ Freedom Crier

    Ironically, you have have proven why Grenville’s has appropriately named this article “Too Much Voodoo.”

    Liked by 1 person

  • @ Artax

    My friend I wish you better luck than I had explaining this.

    The biggest error in this plan is that it disAllows ALL allowances. So if you buY $500,000 in equipment there is no way of capitalising or depreciating it. Total madness for sure. Also on $10M in sales with a 4% net profit taxable at 5% today, which is $20,000, Grenville is now asking that business to pay 10% of sales in tax which is $1000000. So you are asking the business to move from paying $20,000 to paying $1000000 in a single year, while scrapping ALL other taxable allowance. The only accountant that could agree on this is any that might of been at the mental then!

    I mean you only asking them to pay 50 TIMES MORE TAX THAN BEFORE OVER A 12 MONTH PERIOD WHILE THROWING OUT ALL TAXABLE ALLOWANCES. LOL

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  • re I mean you only asking them to pay 50 TIMES MORE TAX THAN BEFORE OVER A 12 MONTH PERIOD WHILE THROWING OUT ALL TAXABLE ALLOWANCES. LOL

    GRENVILLE REAL STUPID DENNNNNNNNNNNNNNNNNNN
    HE NOT A CLOWN HE IS A WHOLE CIRCUS!
    IS THIS THE SORT OF NON SOLUTIONS THAT HE HAS FOR BARBADIAN TAX PAYERS?

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  • Over the course of time GRANVILLE PHILLIPS IS EXPOSINF to Bajans that he is a Lied, inept wannabe politician.

    Even before he gets into the House of Assembly he has shown that he is deceitful AND INCOMPETENT and is NOT GOING TO CONTRIBUTE TO THE REVITALIZATION OF BARBADOS

    In the last 2 days he has shown that his financial plans for a 10% tax or whatever amount he decides IS NOTING MORE THAN A HARE BRAINED IDEA HE PULLUD OUT HIS BOTSIE

    He is another Chris Sinckler waiting to inflict madness pin bajans AND HE MUST NEVER GET THAT CHANCE

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  • de pedantic Dribbler

    @Artax, the analysis by the lady with the misnomer of Freedom Crier says it all about how she operates in the business world.

    You highlighted “The VAT output CANNOT be calculated as ADDITIONAL REVENUE….”

    The only folks who do THAT are those who hold on to those funds as their own!

    That is such a fundamental error that no astute business person would make it .. Only one who misuses VAT proceeds!

    Liked by 1 person

  • @ Donna February 14, 2020 10:36 AM
    “I say that this man knows as much about accounts as he does about the Bible. He does not understand the net effect of VAT. He does not understand what is an expense. He does not understand what is a liability. He does not understand basic accounting. He does not understand that it is the administration of the VAT that is the problem.”
    ++++++++++++++++++++++++++++++++++++++++++++++++++++++++

    Excellent analysis, there dear Donna!
    And a succinct critique of the GP No.2 proposed tax regime.
    You have the ability to put any one of those tutors in the faculty of ‘Business’ on the Hill to shame.

    Our widely admired “John A” is one of the most lucid bloggers on BU with his contributions grounded in the field of commonsense.

    If GP No.2 cannot grasp where John is coming from, then, even GP No. 1 (a ‘Senior’ man trained in a field dealing directly with taxation and accounting) must be ashamed of that boastful hardheaded brat he has spawned.

    GP No.2 is so cocksure of the practicality and ‘philosophical rightness’ of his 10% on-every-thing tax proposal that he has even transferred its applicability to personal / individual incomes whereby every man-jack or woman-jackie in Barbados will not only be faced with a 10 % increase in everything he or she buys but also be faced, upfront, with a 10% deduction from every single cent received whether it be in the form of minimum wages or pensions.

    He plans without a shadow of doubt to abolish the standard deduction of Bds $25,000.00; effectively making those earning less than $25,000 p/a nothing more than paupers in already overly expensive Barbados.

    Grenville’s simplistic tax proposals are so regressive as to make the ‘working’ poor even poorer in Bim.

    Is GP Junior prepared to markup his fees by an additional 10% while making a concomitant reduction of 10 % from his salary he presumably receives from his incorporated business without the provision to make any deductions as costs incurred in the course of earning a living?

    This rigidly pedestrian guy- bereft of that much needed touch of basic human understanding called empathy- ought to stick to his field of engineering and leave politics to ‘thinkers’ and the Bible thingie to the other quack doctor of divinity.

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  • You are technically correct in that the VAT belongs to the government but as usual you see things from the eyes of a bureaucrat each item in Isolation. Let me give you a different perspective. The consumer is paying $117.50 for an item that is the price of the item, that is all that matters to them. If you come and change the tax rates and put all the taxes at the port and the good sells for the same amount of 117.50 the consumer is no better off. KEEP YOUR CHANGES YOU ARE ONLY SHUFFLING THE CARDS THAT IS NOT A WINNING A HAND. Any meaningful changes must bring some Tangible Savings to the consumer. Getting rid of VAT for a flat tax has benefits for companies and for small business who would have qualified to pay VAT in staff savings. That is not enough.

    The comments about retaining the write offs such as depreciation is a good one. The end result you are looking for is, better prices to the consumer and we all are consumers THE GOVERNMENT LOOKS AT US AS REVENUE GENERATORS THEY BORROW BIG MONEY ON THIS PRINCIPLE WE WORK FOR THEM THEY DO NOT WORK FOR US. If you were to look at this talk about taxes the only reason government needs taxes is that they have to pay for the monster size government they have built, a more reasonable approach is to not only look at taxes but the reasons for those taxes in the first place.

    What do we need from a Government, look at all the programs we have hung around our necks and get rid of the unwanted ones and the unnecessary ones for a start, then a better view of what we need to collect in taxes can come into view. The methods of collecting taxes comes second to this and the brilliant minds on BU can come up with which programs are unnecessary and also the unwanted ones. Do you want an unwanted program? If it cost Government a million dollars to school 200 students, the cost per student is $5,000 per year, it is probably more than that but let’s say the $5,000 per year. If they then rented the school-premises to the now private school with a bursary of $4,000.00 per child the government would save 1,000.00 per school child and we would not have to pay for the upkeep of all those buildings. You get the idea, look at government expenses from top to bottom and make the recommendations after looking at the facts at least Grenville is looking. DO YOU THINK THE PEOPLE IN GOVERNMENT ARE LOOKING AT THIS OR ARE THEY PROTECTING THEIR TURF.

    You all say that Grenville is a fool, but at least that fool has a love for Barbados and its people and wants to make it better for all of us and if that is your goal also, help him, come up with better ideas, improve on what he has said. OPEN YOUR MOUTH MEANINGFULLY, BUT THE CRAP SPOUTING HERE DOES NO ONE ANY GOOD.

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  • GRENVILLE PHILLIPS 2 CARRY ON IN YOUR PURSUIT TO RIGHT THE WRONGS, OUR NATION WILL BE BLESSED BY YOUR TIRELESS EFFORTS…ONWARD AND UPWARDS!

    Like

  • Miller February 14, 2020 4:16 PM

    “This rigidly pedestrian guy”

    You nailed that description.

    And he is so sure he is right that he is unteachable.

    Didn’t he show this stuff to his father? Or can not even his father reach him? I have not heard that his father has lost his mental faculties. He would not have been the one professional who gave this policy the nod, I am sure.

    Didn’t he claim that this plan would wipe out the deficit in one year and make a surplus of $I billion? Similarly he claims to have gone from dangerously high bad cholesterol levels and flabby to perfectly balanced cholesterol levels and ripped in three weeks? Before that article I thought he was just childlike in his writing. Only then did I realise that there was something else wrong, dreadfully wrong with his brain. He is strangely deficient . He is living in a world of make believe.

    Why would he even think that he and he alone could come up with a tax policy that could in one fell swoop solve Barbados’ financial difficulties? Why would he think nobody else could have thought of something so simple?

    SMH like Alice in Wonderland.

    Frightening!

    Like

  • Looney Tunes,

    This guy is beyond help. Having him as a prime minister would be worse than digging up the bones of Gearbox and giving him the job. If I remember correctly, Gearbox made more sense.

    Like

  • John A:

    Businesses currently pay 17.5% VAT. In one option, we said that we would reduce this to 10% VAT. Clearly persons would be paying less tax with that regardless of how you do the arithmetic. So your 50 times appears to be a gross error.

    On the other option, we eliminated VAT and corporate tax, and applied a sales tax at 10% with no deductions.
    Businesses with relatively few expenses recoup a minor amount of their VAT payment. Therefore, they will certainly benefit from a 10% sales tax.

    Businesses with higher expenses recoup a larger amount. However, if those businesses own the supply chain (ie, they bring in and sell products), which many do, then they will also benefit from a 10% sales tax.

    In your calculation of 50 times, did you include the VAT that these businesses currently pay?

    Like

  • @ next party 246

    You can’t factor in the VAT as a benefit or a liability to a company. It does not affect the profitability or the expenses of the company. All the companies do is act as collection agencies for the state.

    As for the query on your proposal being 50 times the current tax burden, I outlined that at 3.05 pm. If you look at the current tax on the example given it came to $20,000. Your proposal of 10% tax on the $10M came to $1000000 on the same turnover. The factor of the larger figure over the smaller is a factor of 50.

    As far as the VAT goes I would just ignore it when looking at the corporation tax issue. It’s an amount that already has an owner and that’s the state. Also with the drop in corp tax now to 5% on pretax earnings the tax rate is the lowest it has ever been.

    It actually now is not necessary to even register an offshore company here. You can just have a local company, pay the 5% and apply for a US dollar account. That drop to 5% has now changed the entire ball game in BIM. What we need now is to free up the FX market and let businesses access it easily. For instance I can deposit USD in cash into a USD account here, but if I draw cash off the same account I can only get it back in Barbados dollars. We still have alot of work to do here but there is still hope.

    Like

  • de pedantic Dribbler

    @Mr Phillips, earlier today I asked some queries to you via the Blogmaster on the wrong blog …so let me see if I can redirect to you properly.

    You are an engineer and it would be ridiculous and insane for you to offer definitive solutions for a major reconstruction project (as you have done with ur tax policy) unless you had carefully done your modelling/drafting/diagramming/measurements.

    Why are you therefore bringing that insanity to this MASSIVE tax reconstruction?

    Why offer the insane retort: “Clearly persons would be paying less tax with that regardless of how you do the arithmetic.”

    Have you NOT done your modelling?

    Why can’t you answer the blogger’s query with HARD DATA showing how your tax would work for maybe a retail company doing $5 mil in sales and a services company comping around $1.5 mil/year?

    What does YOUR modelling say?

    Your response sounds absolutely untethered to any reality!

    What are some numbers for your other term paper response that we eliminated VAT and corporate tax, and applied a sales tax at 10% with no deductions. Businesses with relatively few expenses recoup a minor amount of their VAT payment. Therefore, they will certainly benefit from a 10% sales tax.

    Is this some game Grenville?

    Do you really want to be taken seriously or are you simply doing some sorta self actualization ritual!

    What is your modelling that affirms that Businesses with higher expenses recoup a larger amount. However, if those businesses own the supply chain (ie, they bring in and sell products), which many do, then they will also benefit from a 10% sales tax.

    This is NOT the stuff that a Barrow or Adams or even a Thompson would have presented … How does an ENGINEER talk in such ephemeral tones?

    Why cant you EXPLAIN …

    *–How much money per annum (1st year and then following years as the collection supposedly improves) will the 10% flat tax bring in?…. *–How does that compare to current tax revenues?

    *–What tax revenue increase or deficit would there be with the 10% corporate rate?

    –What are 1st, 2nd yr revenues for foreign currency, that would be: *–“taxed at 0% during the first year, and 2.5% thereafter”?

    *–What are the scenarios re the late payments of 10% fee after the 1 month deadline for taxes payable…ie what contingencies are there for default etc?

    *–What are revenue gains/deficits with the abolition of VAT and NSR and use of your plan?

    You need to offer solid details on the tax policy or just simply shut up.

    If you have done the necessary detailed work then provide excerpts.

    Flat tax proposals are long held views by US conservatives so let’s be clear that your suggestions are NOTHING new but you still have to detail how it works for Barbados … Stop the games….

    You may not worry about being called a fool but surely an engineer should be concerned about unscientific BS!

    Like

  • @ De Pedantic Dribbler formerly known as de Ingrunt Word

    Finally people are “fixing” Granville Phillips to goalposts that he cannot move.

    Let me tell you a likkle secret about de ole man.

    I accept that we are fallible beings prone to make mistakes but when your faults are pointed out AND AS OPPOSED TO SAYING SORRY, and adjusting your position, WHAT YOUR RH does is dissemble, YOU ARE NOT TO BE TRUSTED IN ANYTHING BIG

    When people speak it is possible to package what they are saying into compartments.

    Like all this sophisticated VAT SUBJECT MATTER becomes what is the base amount you can divide and who is exempt from that baseline number.

    De ole man lef school at 11 (behave yuhself) so I got to develop a system that I can wuk wid.

    It is these repeated practices where Grenville changes that baseline number just so that causes de ole man to know he is lying.

    I is not an accountant BUT I KNOW WHEN YOU CHANGE THE GOALPOSTS!

    And it’s this characteristic that shows Grenville up.

    HE MUST NEVER EVER ENTER THE HOUSE OF ASSEMBLY!

    Like

  • @ the Honourable Blogmaster

    Please retitle this blog

    TOO MUCH DOO-DOO not voodoo!

    Like

  • @ John A February 14, 2020 11:07 PM

    “@ next party 246
    You can’t factor in the VAT as a benefit or a liability to a company. It does not affect the profitability or the expenses of the company. All the companies do is act as collection agencies for the state.”
    ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

    That fact is staring GP No. 2 right in the face yet he bluntly refuses to take it into account.

    You have already told the blinkered wannabe economist cum accountant that businesses (as long as they are registered and trading in taxable outputs) do not treat the input VAT as an expense but merely act the tax collection agencies of the State.

    It is the final consumer whose pays the full 17.5% VAT on all taxable goods and services.

    As a matter of fact it is the final consumer/buyer who pays all taxes imposed on businesses including the corporation tax where payable. Everything is included in (built into) that final price charged to consumers.

    The VAT system is a more proficient system of tax imposition. The problem with it in Barbados is that it is poorly administered and characterized by too many exemptions made out of political expediency.

    Like

  • de pedantic Dribbler

    Alas, @Pieces I have to agree with your assessment at 12:41 AM.

    Mr Phillips continually shifts the goal post and in the face of viable and definitive queries from the accounting/economic professionals like @PLT, @John A and @Artax who in particular show NO political or personal bias towards him, he simply waffles.

    So again I say to the Blogmaster: Sir, you herald this gent as a breath of fresh air on the political scene and give him a forum weekly… so why are you not demanding he answer the hard questions?

    You said your team probes deeply and clearly your exposées here validate that; so what is the depth on Phillips, why are you giving him this pass?

    If he cannot answer the basic queries or explain the analysis offered by the experts on his taxation policy then why is he being allowed to write weekly as a saviour of our nation?

    An integral step of any ISO efficiency management project is understanding the HARD DATA factoids of your work process and effectively reimaging/retooling to improvement… where has Phillips shown us ANY hard data factoids.

    If he wants a weekly forum to speak and preach because he has reached his self actualized stage of growth, then so be it and those who choose to participate and play his game are free to so do…but anyone looking for a serious governance option is clearly on a losing path !

    So what is it Mr Blogmaster…is this simply blog fodder for weekly hits to the site or are you going to ask the guy TO PUT UP OR SHUT UP… why are you offering us this absurd, non-fact based, losing path !

    This is unsustainable and you know that.

    Like

  • @Dee Word

    It is unsustainable for who again?

    Like

  • de pedantic Dribbler

    Oh BTW @Pieces for a bro who left school at 11 your grasp of a wide swath of stuff is impressive.

    Great that you were able to fall into the hands of intelligent mentors who fantastically filled in your high school education … coupled of course with maybe some ‘savant’ type intellect on your part!

    No wonder you wear those coloured tinfoils so well… You savant types tend to be ‘out there’!😁

    Like

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