A Government backbencher continues to make the call for the abolition of income tax and corporation tax in this country.
Speaking with the Barbados Advocate recently, Member of Parliament for St. Lucy and Ambassador to CARICOM Denis Kellman, maintained that both tax regimes are presently working against the country and not in our people’s best interest. He went on to explain that if the move is made to do away with both taxes, efforts would also have to be made to discontinue the payment of overtime and promote moonlighting. That, he maintained, would ensure that there is greater productivity within the business community.
“What we need in this country is the expansion of business, not retention of business. Right now what we are doing is keeping the same status quo and it is because we have something called corporate taxes where our businesses want to save, so they spend to save. But what they spend on, is to paint a wall, paint a building, change a light, you don’t want that, you want businesses to add a room, expand their production. So instead of going towards corporation taxes, you need to have a tax that will come off the sales,” he said.
To that end, Kellman is suggesting that value added tax (VAT), currently set at 15 per cent should be increased and a sales tax to replace the corporation tax introduced in Barbados. The MP is suggesting that by doing the latter, Government would attract more revenue. He added that by abolishing the income tax, they would be increasing the disposable income of those who currently pay that tax and for those who do not pay income tax and receive the reverse tax credit; he is suggesting that that credit be increased.
“You have to see it now as a tax on foreign exchange for the using of money. So as you consume you pay, if you don’t consume, you don’t pay,” he said.
The MP, who is also suggesting that overtime become a thing of the past and that Barbadians get into the habit of moonlighting, contended that this and the elimination of income tax should have been explored back in 1997, when VAT was first introduced.
“Remember that at the end of the day, what we are pushing for is a reduction in the cost of producing goods, so you cannot do it without thinking about the switch from overtime to moonlighting and the abolition of income tax. So it is not a piecemeal approach, it is a complete approach and a complete overhaul that I am asking for,” he said. (Barbados Advocate)
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