DON’T BANK on anything a politician tells you or you might find yourself in dire trouble. Those who had plans for their income tax refunds can attest to that. This particular group has perfected vacillation to a fine art.
So it really amused me when I heard Senator Irene Sandiford-Garner say that she didn’t understand why the Tax On Assets Act 2015 was such an issue since it was a temporary tax. Did she really listen to herself? Anyway, Senator Sir Roy Trotman showed he wasn’t dozing and reminded her of the many instances when the termination dates for temporary taxes had passed, apparently without anyone noticing.
Remember the temporary 2.5 per cent increase on VAT instituted in 2010 for 18 months and which is still with us in 2015? In 2011, the Nation newspaper quoted Minister of Finance Chris Sinckler: “It will be under review after a year and then we would look at it and see. At the end of 18 months the extra 2.5 per cent ends, so it automatically goes back to 15 per cent. But we would analyse it to see if, at that time, it should be extended or not.” Now isn’t that the epitome of clarity? Now we hear that the reform programme, which I assume includes the consolidation tax, originally to end in March 2015, will be continued until 2016. How can anyone plan under these conditions?
Remember 2012 when Minister Dr David Estwick was reported as saying: “We are going to be producing our sugar for domestic consumption, and we are going to be producing our sugar for regional consumption, within the context of the Revised Treaty Of Chaguaramas and along with the other value-added products we are looking at.” He noted “it costs BDS$4 100 to produce a tonne of sugar, which is then sold to Europe for BDS$980. That is bad maths. I am not therefore going to support it”. No one could question his logic.
But I had to laugh when he repeated roughly the same words a few weeks ago (almost three years later), except that he added another phrase “after this crop”. He also keeps saying that the sugar industry will not die under his watch. Doesn’t he realise that it will die if he just keeps watching it? But Mr Minister, have no fear, I can assure you that no one thinks you’re half a clown . . . .
If we look much further back – actually 25 years ago – Mr Owen Arthur was quoted as saying: “The time is coming when it will be necessary to take some irksome taxes off the books entirely. Barbados is one of the few countries which retains a land tax. It falls on imputed improved value of property and it is a sheer penalty on the holding and improvement of property in a society which sees itself as a property-owning democracy. We should not entice hoteliers to improve their property and then draw blood by a punitive land tax. We should not encourage manufacturers to build factories and then tax them on their improved value. We cannot ask the general public to invest in housing construction and home improvement and then tax them on the investment which for most is their only asset . . . and we cannot truly ask all the small people out in the villages to buy land and improve their lot and then tax the effort. We owe it to ourselves to phase out and abolish the land tax as soon as circumstances make it possible.”
Of course, that time has never come, although many years in the interim (most under Mr Arthur’s watch) were seen as the “glory” years. But the younger generation isn’t as accepting as we are and question why, having paid for their land, they must pay land tax. They understand the logic behind a road tax (although these days, judging from the condition of the roads, you can’t see where this tax is going) and tax on income to go towards health, education, social services and so on, but are hard-pressed to find a reason for land tax. I suppose that may be why people expect Government to clean their unoccupied lots – they feel they’ve paid for the service.
Next time you hear about a temporary tax, don’t fall for it. Politicians have their own dictionary where temporary means whatever suits them.
• Dr Frances Chandler is a former Independent senator. Email [email protected].
