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Govt taxing everything


Shantal Munro-Knight

Govt taxing everything

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I WAS AT THE GYM RECENTLY when the instructor hollered out that we ought to put everything that we had in the workout because very soon there will be tax for moving.  His thinking was that since the Government was taxing us in every other facet of our lives the only thing left to tax would be moving. I could not agree with him more.
It seems that the key pillar of this Government’s economic plan is built on taxing the population into poverty. In this effort there is clearly intent that no one escapes and that every area of possible social activity is taxed. I can imagine someone sitting before a list and hunting through all the possible areas that could be taxed and having an aha moment when they come upon a new possibility. It was perhaps this process that led to the imposition of the solid waste tax as well as the 0.20 per cent tax on the assets of credit union.
It does not matter if the credit union tax is for one year or not. It is essentially taxing Mrs Browne who barely makes enough to make ends meet but commits to putting a small bit on the credit union each month to save for her retirement or a vacation every year. It is taxing Joe Blow who gets a little job here and there but who has committed to putting down two cents to save for his children. I admit I take this a bit personally because I understand very intimately the faces and the stories of the people behind the assets who save with the credit union. The large majority of the base of the credit union are people whose income bracket would mean that they normally fall under the current tax threshold. This new tax now captures them and ensures that along with VAT all of these Peters are paying extra for Paul.  
When you add this to fact that Government has also removed the tax allowances (a supposedly temporary measure) for savings for credit union members indeed it is unwittingly (I am being generous) undermining one of the few “poor man’s” institutions.   This is not to say that the credit unions as they currently function are the perfect bastions of the aspirations of the average Barbadian. Clearly there are issues with governance and perhaps the need for more forward-looking investments but the solution cannot be to penalise them because they have been able to effectively marshal the savings of thousands of Barbadians. The combination of all of these taxes means that for the majority of Barbadians we are each individually paying for the nation’s fiscal deficit directly from our pockets. 
This Government’s strategy for addressing the fiscal deficit is like a money grab with no social conscience. It is a strategy that is doomed to fail since there is no complimentary strategy to address the deficits in the efficiency of Government to actually collect revenue. 
If the Auditor General’s report is anything to go by, it seems that we are operating one big sieve with no accountability for what’s staying in and what’s slipping through. It is alarming for an Auditor General to have to complain that the financial reporting of the main revenue agency is highly suspect.
Instead of the Government seeking to address its own inefficiencies, it has sought the easy way out by taxing a population that is already reeling from high unemployment, disorganised lay-offs and cuts in social expenditure. It would seem to me that this not the best recipe for social stability and resuscitating economic growth. 
It seems that everyone realises this; clearly Moody’s does, the private sector is becoming more and more critical by the week and from the tenure of conversations on the street average Joe in the rum shop and single Mom Shirley is holding out no hope that there will be any relief in the near future. It seems that we are on a rudderless ship where the captains (there is usually one but no is sure so I just gave everyone the same title) can only see as far as today. This means that strategies are short term and lack the ability to effectively address fundamental problems.
More worrying is the fact that the captains also seem to have their ears covered and the covering is inhibiting their hearing. Despite calls for greater dialogue, continual complaints by the credit union and calls from the private sector for the reconstitution of the Social Partnership – which has somehow gone into abeyance?– the captains have remained resolute on their course. 
Can we get back on course? Will we weather the storm? Will the true captain step forward?
More questions than answers.
 Shantal Munro-Knight is a development specialist and executive coordinator at the Caribbean Policy Development Centre.

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