Saturday, April 20, 2024

Better fund collection needed


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CHARTERED ACCOUNTANT DOUG SKEETE says that Government’s revenue collection agencies need to be more efficient in bringing in the hundreds of millions of dollars owed them.
Skeete made the point yesterday while warning Government against increasing taxation in any effort to collect more revenue.
Government has indicated that some of its revenue collection agencies, such as the Inland Revenue, Land Tax Department and VAT Office, are owed approximately $700 million.
Skeete, who was part of the panel on STARCOM’S 92.9 FM radio Sunday Brass Tacks programme, pointed to the importance of proper management of the island’s financial resources, so as not to exacerbate the fiscal deficit.
The other panellist Andy Armstrong, president of the Barbados Chamber of Commerce & Industry (BCCI), reacted to the suggestion a temporary increase in VAT could be one revenue-raising measure.
He said: “The perception is that if you had to increase VAT temporarily to shore up the current situation, that could be palatable; but the danger is you increase by one or two per cent and you never get it back.”
Moderator Don Marshall, a social scientist at the University of the West Indies, queried what would happen at the roll back in a year or two if the current level of VAT was increased by one or two per cent.
He raised the issue of whether businesses in the retail sector would have prices such that consumers could be assured that the prices would be at a rate they would have been if there had been no increase in VAT.
Armstrong in response said: ” I believe competition will bring them [the prices] down . . . but I don’t know that you are going to convince the general public that that is going to happen.”
Parliamentary Secretary in the Prime Minister’s Office, Senator Jepter Ince, who called in on the programme, said that over the years when there had been problems with statutory corporations or in Government agencies, “instead of finding a solution or putting systems in place, or policies that would reduce expenditure, we answered those calls by borrowing . . .” .
“So whenever there was a problem in a state agency, instead of charting a course and looking at how best we control the expenditure . . . we answered it by borrowing $10 million and $15 million. And when the problem arose again the next financial year, instead of dealing with it, we borrowed another $15 million.”
Ince indicated that prudent financial management had to be instituted and that this had to be done now, as well as having cost controls on Government projects.
He also pointed to the importance of maintaining both the social programmes and small businesses during a recession.
Accountant Skeete added that maintaining the social net could not be done in isolation from what was happening in the economy. (ES)


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