Financial Statement and Budgetary Proposals for 2011 delivered by Minister of Finance and Economic Affairs Chris Sinckler in Parliament today - Part 3 of 3

Conclusion:

Mr. Speaker there is a saying that goes something like this:

I do not know what the keys to success are, but I know the key to failure is trying to please everybody. The measures and programmes which I have just outlined on behalf of this Government are unlikely even in the most ideal of circumstances to please everybody in Barbados.

While we would have liked to offer every Barbadian everything which they might desire to see, we knew that our constrained fiscal and other circumstances would not allow us that luxury.

What we do know however is that Barbados is the sum total of its parts and achieving the lofty objectives of advanced status in the shortest possible time will not be achieved if we do not join hands to work together as Team Barbados.

And as a great cricketing nation, we know that working as a team means combining resources just as it means each sacrificing self for the advancement of the team.

When the team is in trouble it is not time for selfishness and individualism, but a time for preservation, collectivity and application. This relatively young government has had more than its fair share of setbacks and challenges, most not even of our own making.

But having been called upon by the people of Barbados to lead the team in its most challenged period we have applied ourselves to the task, developed a clear and workable plan, and have rallied the people of Barbados to play together to successfully execute that plan.

As with any plan in even the best of circumstances there will be setbacks.  But is not how many times you stumble or even fall but how quickly you get up, compose yourself and push on towards the victory.  This Budget is but yet another installment in the Plan of Team Barbados to bring us out of the recession even better than we went in. The plan is working.  We lost an early wicket at the top of the order, but the middle order is holding ground and runs are becoming to come.

Now is the time for all to pull together for the good of the team.  No cheeky singles or no big and irresponsible shots will get us where we want to be. The wicket will get better. The sun is coming out again and the early moisture is beginning to dry.

We need to stick to basics, play ourselves in, take the runs that we know we can safely get, and rack up a big score for our country.

This strategy which we have pursued is designed to get us just that but it must be a full and total team effort.

As we close this last session in today’s play I urge all Barbadians to reflect on the words of the second verse of our national Anthem:

“The Lord has been the peoples guide for pass three hundred years. With him still on the people’s side we have no doubts or fears. Upward and onward we shall go, inspired, exulted, free, and greater will our nation grow in strength and unity”

Mr. Speaker, Honourable Members, fellow Barbadians, may God Bless us all.  Thank you.

APPENDIX 1

Summary of Budgetary Proposals

• The adjustment of the existing land tax bands while maintaining the current rate structure.

For residential properties: -

1. At present the first $150,000 is exempted from tax.  I propose to raise that to $190,000.
2. The rate of 0.1% is applied up to the next $400,000 in value.  I propose to raise this to $500,000.
3. Up to $1,250,000 in value a rate of 0.45% will be applied. This moves up from $1,000,000, and
4. A rate of 0.75% will be applied to all properties in excess of $1,250,000.  This is an increase of value of $250,000 up from the previous value of 1,000,000.

• The basing of all land tax rebates on the tax demanded.

• The granting of a rebate of no more than 50% on the land tax demanded for that year, for properties which can prove that they have engaged directly in the manufacturing activity and those which have been certified by the Division of Energy to be engaged in the production/manufacture of solar energy.  
• The requirement of a tax clearance certificate from Inland Revenue Department and VAT Department in order to access the rebate on land tax.

• The granting of all rebates on land tax within the year in which the tax is due.

• The payment of land tax bills by the hotel sector and restaurant during the last quarter of the fiscal year without losing access to the discounted rate.

• The increase in the energy conservation and renewable energy deduction from $5,000 to $10,000 per year for individuals and $25,000 per year for registered small businesses. 

• The write-off of 150% of costs associated with the conversion to alternate energy over a five year period for businesses whose filings with the Inland Revenue Department and VAT Division and whose compliance with NIS and Land Tax are up to date or who have in place arrangements to settle their arrears.

• The increase in the late filing fee for income taxes from one hundred dollars ($100) to five hundred dollars ($500).
• The separation of business and employment income for the computation of tax payable with effect from tax year 2011.

• A 100% waiver of interest and penalty on outstanding tax due to the departments under the Waiver of Interest and penalties programme if payment of eighty percent (80%) of the amount due is made in full by a one-off cash payment. 

• The reduction of the fees payable by paramedics, medical technicians and medical dispatchers under the Profession, Trade and Business Act, Cap 373 in line with that payable by nurses.

• The reinstatement into the Income Tax Regulations of the tax free status of the 25% lump sum payment to persons on reaching retirement age.

• The implementation of the new fee structure under the Occupational Pension Benefits Regulation with effect from September 1, 2011. 

• The amending of the Occupational Pension Benefits Regulation to permit a drawdown account to be used as a variation on the form of pension payment available to a member upon retirement from a defined contribution plan. 
• A reduction of the taxes paid by businesses on remittances to insurers based outside Barbados who provide global insurance coverage from income year 2012.

• An amendment to the VAT Act to allow hotels offering time share properties to claim a refund of input tax paid in respect of goods purchased locally.

• Zero rating for VAT purposes of all sporting vehicles, equipment and gear temporarily imported for the sole purpose of competitive activities with effect from September 1, 2011.

• The provision of a rebate of up to five thousand dollars ($5,000) to farmers who retrofit their livestock housing structures with the use of solar energy.

• The provision of financial assistance for the purchase of three mulch compositors and three row mulchers and the accompanying mulch lifters to give fruit and vegetable farmers access to cost effective equipment to be used for production and application of disease and weed-free organic matter.

• The reduction of the interest rates on loans from the Agricultural Development Fund to 5% over the next three years.

• The discontinuation of duty free concessions to the hotel and manufacturing sector on the importation of electric water heaters effective January 1, 2012.

1. Effective 1^st September 2011, all parts imported into the country for the purpose of assembly of personal computers will be free of all import duties and VAT.

• The dematerialisation of all Government Paper with effect from January 1, 2012.

• With effect from January 1, 2012, the exemption from publishing a prospectus by SMEs wishing to access equity through an issue of shares under specific conditionalities (where issues are no more than BDS$5 million, where the issues are made to no more than 500 persons and as long as the issuing company is listed on the Barbados Stock Exchange).

• The provision of an energy grant of $5 million through the Welfare Department to assist the disabled and aged with payment of their electricity bills.

• Government of Barbados will provide by way of a government backed guarantee, a facilitate to provide for the borrowing of $50 million dollars in amounts of $10 million every year for the next five years starting in 2012 to support this mechanism. These resources will go directly to support the promotional, marketing and distribution efforts outside of Barbados of Barbadian musicians, artists, designers and chefs.

• The Ministry of Finance will undertake on a case by case basis to support requests for partial waivers of duties on some equipment required to upgrade music studios across the island. This will be facilitated in collaboration with the Ministry of Culture and the Small Business Association.

APPENDIX II

RESOLUTION

Whereas the Financial Statement and Budgetary Proposals 2011 delivered by the Minister of Finance and Economic Affairs is made against the background of an expected improvement in the global financial and economic environment, the impact of which is reflected in marginal growth in the domestic economy;

And Whereas Barbados has had to adjust its economy to face the challenges presented by sectors such as tourism, manufacturing and agriculture, to accommodate the reality of these global conditions;

And Whereas the Government proposes to institute policies and programmes to maintain levels of employment, a steady rate of export growth and take our productive sectors to a higher level of performance and competitiveness;

And Whereas the Government seeks through the Financial Statement and Budgetary Proposals 2011 to address the issues and the fiscal performance within the Barbados economy, to stabilise and expand the economy and to take Barbados to a higher level of economic accomplishment;

Be It Resolved that the House take note of the Statement delivered by the Minister of Finance and Economic Affairs;

And Be It Further Resolved that the House strongly endorses the proposals set out in the Financial Statement and Budgetary Proposals 2011 which seek to reduce the fiscal deficit; facilitate business operations and development; and lay the groundwork for sustainable growth.

Schedule 1                                                                               Appendix III

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