By the hook or however I will get my taxes.
That is the insidious message sent to all Barbadians.
Thinking people who had warned that an increase in VAT and other taxes produce less revenue for Government rather than more, have been proven right. Little by little things that we have already paid taxes for are now taken away from us and we have to pay punitive and usurious taxes for them again – education, health, collection of garbage, transportation, protection of the poor, to name a few.
But there is an even more sinister plan afoot.
I have been warning that people in Government have seen the effect of the Cyprus move to target the savings of the people in the country. This obviously has not gone unnoticed by the quick-fix practitioners of our economic “planning”. I have shown that there is a way to get to the $8.9 billion savings of the country through the legal obligations of the banks where those savings are kept. That way, the Government uses part of the savings of the country – that is, the $8.9 billion that we save; all of this in addition to other taxes, people. If banks want back their investment (your savings), the Government could not pay.
Now there is a municipal waste tax that has no bearing on waste but is simply a hand in your pocket, added to the property tax that will be calculated on the improved site value of each property in Barbados. What is unconscionable is that as it stands, it may be retroactive to September 1, 2013. Legal?
Not satisfied with that, if not paid there is a penalty of five per cent of the tax (automatically attached for 2013?), and interest on that penalty, plus interest of one per cent per month (cumulative?) on the tax until whenever paid. (Bank interest is six per cent). So they are taking away your savings and your property. You think it is fair then for magistrates to jail youngsters for stealing? It is unfair and insidious and takes advantage of us.
The citizens have no recourse. If you refuse to pay the municipal waste tax and you deduct it when paying your property tax bill, it sticks like the fangs of a pit bull to the property, obliging you and your children to pay it whenever or eventually lose the property. The property cannot be sold unless all tax obligations are settled first. To pay the municipal waste tax one is obliged to use [some of] the $8.9 billion saved in the bank or accept a lower return when the sale of the property is effected. It is a penalty for owning a property. It is wrong.
Savings are the bedrock of a society. If there are no savings, there can be no loans. Just look at countries with no or little savings. When you trample on the savings of the country you are trampling on the aspiration of the citizens. Amen!
Banks are in a dilemma. The Government has them squeezed on all sides – taxes, low investment interest rates, and customers who are reeling from job losses that force them into delinquency in the loan portfolios of the banks. Banks only forgive, nay write off, debts when no other recourse is available. Do not be fooled by the “what big teeth you have” front. Unfortunately, the only helping hand that the bank can offer and which the customer is obliged to accept is to put the customer further in hoc. Further hoc? Now the banks have to consider the new tax on the value of mortgages since the tax in law ranks ahead of them.
By reconstruction the customer must take a longer period to repay but the bank gets more interest. When you are facing the bank manager next time, just ask if any interest will be forgiven. There is no altruism. Most times the customer has to accept a worse position for survival.
Two things will now happen in Barbados as night follows day. The Central Bank, as “the only true economists in the land”, will be issuing directives to the banks to be careful in extending foreign exchange to customers, in which case the price of the US dollar will rise on the black market. People with foreign exchange outside of the island will keep the foreign exchange outside.
Forbes Burnham introduced a measure: if you do not have tax clearance you cannot travel. Your turn Mr Government. Kill us! Which Government member has a heart? Imagine us Bajans supporting Benny Hinn and not Bobby Clarke. Bizzy, yuh right!
• Harry Russell is a banker. Email [email protected]
