Government has been warned that its continued heavy taxation could inflict further damage on the economy and trigger a possible collapse in business confidence.
University of the West Indies (UWI) lecturer and economist Professor Michael Howard, commenting on the 2011 Budget, has also urged the Freundel Stuart administration to restore the value added tax (VAT) to its original 15 per cent rate rather than wait until next year.
“I also believe that the time has come to ease the heavy taxation. The discipline of public finance teaches us that heavy taxation reduces growth, and the modernist view is that lower taxation is preferable to high taxes in generating higher productivity and employment.
“Also, higher tax rates do not always lead to proportionately higher revenues, especially if the economy is in recession or compromised by high levels of tax evasion and arrears,” Howard told the SUNDAY SUN.
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