• Today
    December 13

  • 03:24 AM

Key points from Mini Budget

BGIS,

Added 11 June 2018

mia-mottley-2

Prime Minister Mia Mottley arriving ahead of the Mini Budget presentation. (Picture by Reco Moore.)

Below is a summary of the key fiscal measures announced by Prime Minister and Minister of Finance Mia Mottley in her Mini Budget presentation delivered on June 11, 2018.

 

i. Effective July 1, 2018 the National Social Responsibility Levy (NSRL) will be repealed. The Fair Trading Commission will be asked to monitor developments to ensure that retailers reduce their prices appropriately;

 

ii. Effective July 1, 2018 the road tax will be abolished and replaced with a Fuel Tax. The Fuel Tax will be levied at a rate of 40 cents per litre of petrol and diesel and 5 cents per litre on kerosene effective July 1, 2018;

 

iii. Effective July 1, 2018 the annual registration fee for commercial vehicles will be reduced by 50%. Also, with effect from July 1, 2018 there will be a fee of $400 charge on the transfer/sale of a private vehicle and $1,000 on the purchase of a new or second hand commercial vehicle;

 

iv. Effective July 1, 2018 in an effort to improve the progressive nature of our tax system to share the burden fairly, we will introduce a new higher rate band of 40% on that part of income greater than $75,000. The fiscal year costs will yield $41M while the remainder of this year will yield $31M;

 

v.Government is prepared to waive all interest and penalties payable on Income Tax, Land Tax, Corporation Tax, Value Added Tax owed to the Barbados Revenue Authority for the tax years 2000 to 2016 on condition that:

 

•  applicants have made arrangements with the Barbados Revenue Authority (BRA) between July 1, 2018 to December 31, 2018 to facilitate an agreed payment plan which will include a compliance clause; and

 

•  failure to meet the conditions set out in the payment plan will result in all interest and penalties becoming payable to the Crown immediately.

 

vi. Effective October 1, 2018 government will introduce a Health Service Contribution at a rate of 2.5% with 1.5% of incomes being paid by employers and 1.0% by employees. This measure will raise $45M in a full year;

 

vii. Effective July 1, 2018 the highest percentage of corporation tax will increase from 25% to 30%. This will raise $57M in a full year;

 

viii. On-line transactions undertaken by Barbadian residents will be subject to Value Added Tax effective October 1st, 2018.

 

viii. Effective October 1, 2018 an Airline Travel and Tourism Development tax paid by passengers flying outside of CARICOM of USD$70. Passengers flying within CARICOM will pay US $35. The revenue gain from this measure is $95M, with $75M going to BTMI and BTPI and the remaining $20 million to central Government ;

 

ix. Effective July 1, 2018 government will introduce a Room Levy on hotel rooms. The rates will now be US$2.50 for the B Class and apartments, US$5.50 for the A Class and US$10.00 for the luxury hotels per room per night;

 

x. Effective July 1, 2018 the levy will be 2.5% Product Development Levy on Direct Tourism Services;

 

xi.  Effective August 1, 2018 there will be a 10% tax on all shared economy such Airbnb, Homeaway, Expedia etc;

 

xii. Government has reached an agreement with the Unions to allow for a zero percent increase in wages and salaries for the period April 1, 2014 to March 31, 2018 and a  five percent, across the board, increase in wages and salaries for the period April 1, 2018 to March 31, 2019;

 

xiii. Government will from July 1, 2018 raise the minimum non-contributory pension from $155 to $225 per week at an annual cost of $20M. For the nine months beginning July 1, 2018 this would cost the treasury $13.5M and a full fiscal year $18M.

 

xiv. There will be a temporary increase to the Welfare Department and our poverty alleviation initiatives to the tune of $5M per annum until poverty rates fall back;

 

xv. The undergraduate tuition fees for those persons attending the University of the West Indies will be abolished. This will cost the treasury an additional $22M annually.

 

xvi. A Trust Loan Programme will be introduced within 3 months to offer up to $5,000 loans to those entrepreneurs without collateral on presentation of a viable, basic expenditure plan. The interest rate will be the same as earned on Barbados government securities. (This Trust Loan Programme will cost $10M in a full year and will be established as soon as possible.);

 

xvii. Safety Officers and additional Social Workers and Guidance Counselors for 7 secondary schools will be hired for the next school year;  A system, of Master Teachers and Senior Specialist Nurses will be established at a cost of $5M;

 

xviii. The opening hours will be extended to 24 hours for two (2) Polyclinics:

•        Randal Phillips; and

•        Sir Winston Scott

This will be at a cost of $3 million.

 

xix. Three temporary Judges with be assigned to the Supreme Court in order to eliminate the backlog of cases at a cost of $700,000;

 

xx. Sugar Farmers will be provided with a partial settlement in 2018-19 costing approximately $5M;

 

xxi. Government will remove the costs of the Barbados Tourism Marketing Inc. and Barbados Tourism Product Authority from its budget by entering into a Public-Private Partnership between government and this sector. The BTMI will be funded through the proceeds from the Airline Travel and Tourism Development tax which the Government will collect and handover to the BTMI/BTPI. The BTMI will now be led and managed by the private sector;

 

xxii. From August 1, 2018 Government will also remove the expenditure of the Sanitation Service Authority from the budget by funding it through a new Garbage and Sewage Contribution (GSC) to be levied through Barbados Water Authority bills. The GSC for households will be $1.50 per household per day. Commercial premises will pay a Garbage and Sewage Contribution that will be set at 50% of their existing water bills, with 25% going to SSA and 25% remaining at BWA; we will review the existing sewerage and connection fee being charged to South Coast and Bridgetown Sewerage Plants.

 

xxiii. Fix the South Coast and Bridgetown sewage problem with an allocated budget of $27M;

 

xxiv. $20M to purchase new buses for the Transport Board and $5M for repairs;

 

xxv.   $15M to purchase garbage trucks and tractors for the Sanitation Service Authority;

 

xxvi. $10M to purchase equipment for the Ministry of Transport, Works & Maintenance;

 

xxvii. Introduce an essential road repair and debushing programme that will cost $25M;

 

xxviii. Commence a programme to eliminate pit toilets and at a cost of $10M;

 

xxix. Aim to make Barbados more climate resilient ahead of the most dangerous months of the hurricane season including the establishment of a rapid roof replacement programme. This will cost a further $5M;

 

xxx.   Expand the Accident & Emergency Department of the Queen Elizabeth Hospital at a cost of approximately $10M;

 

xxxi. A $2M investment in Smart Bridgetown;

 

xxxii. $2.5M to fix the Supreme Court;

 

xxxiii.The sum of $2M will be provided to strengthen revenue collection at the Customs Department, strengthen the Compliance Unit and revenue collection at the Barbados Revenue Authority, create an Arrears Unit and to cover payments of experts;

 

xxxiv. Given the change in the OECD regulations with regard to the residency of corporations, it is expected that a number of companies will now fall into the tax net as a result of the anti-hybrid mismatch rules and thus now make a contribution to corporation tax.  This is expected to yield $60M; and

 

xxxv. Government will allocate $2M for the electrical upgrade of National Housing Corporation (NHC) housing units.

These measures will give a surplus of 1.8% of GDP ($182 million) to the end of March 31, 2019 and going forward will reduce government’s recurring expenditure since these entities will no longer be on governments books.

Recurrent expenditure will decline by $23 million by the end of the fiscal year.

New capital expenditure for this fiscal year is $134.5 million. The net revenue for this fiscal is $150 million.

JOIN THE DISCUSSION

Dos and Donts


Welcome to our discussion forum here on nationnews.com. We encourage lively debate, but we also urge you to take note of the following:

  • Stay on topic – This helps keep the thread focused on the discussion at hand. If you would like to discuss another topic, look for a relevant article.
  • Be respectful – Meeting differences of opinion with civil discussion encourages multiple perspectives and a positive commenting environment.
  • Do not type in capitals – In addition to being considered “shouting” it is also difficult to read.
  • All comments will be moderated – Given the volume of comments each day, this may take some time. So please be patient.
  • We reserve the right to remove comments – Comments that we find to be abusive, spam, libellous, hateful, off-topic or harassing may be removed.
  • Reproduction of comments – Some of your comments may be reproduced on the website or in our daily newspapers. We will use the handle, not your email address.
  • Do not advertise – Please contact our Advertising Department.
  • Contact our Online Editor if you have questions or concerns.
  • Read our full Commenting Policy and Terms of Use.
comments powered by Disqus

POLL

Do you think that trade unions have done enough to ensure retrenched workers are not disadvantaged?

Yes
No

FRONT COVER OF TODAY'S NEWSPAPER

CARTOON

INSTAGRAM