Trade Unionist Caswell Franklyn says the National Insurance and Social Security Service (NISSS) should not be collecting money for the renamed Resilience and Regeneration Fund.
He told the DAILY NATION that Government had no authority to allow the fund, which was announced in the Financial Statement and Budgetary Proposals in March, to be paid into the NISSS. It took effect from April 1.
However, Minister in the Ministry of Finance Ryan Straughn said with Cabinet already giving the green light for the measure, they will soon be bringing the relevant legislation to facilitate it.
“The Government is allowed under the Provisional Collection Of Taxes Act to raise a tax or to increase a tax, but the condition is that the money must be paid into the Consolidated Fund. So nobody outside the Consolidated Fund can receive money raised in the Budget,” Franklyn charged.
Separate statute
“National Insurance is not the Consolidated Fund, so National Insurance can’t collect it. They have to pass legislation or do whatever National Insurance does to collect increases and their contributions. But they can’t do this with National Insurance because it is not for National Insurance money. So they need a separate statute to raise this money and they have not done so. They cannot legally do so because this is no tax,” said the head of Unity Workers’ Union.
He emphasised that “the law allows the Government to raise the tax and collect the money for up to four months after . . . and then you have to pass the legislation within that four months.
“This is not a tax. So I ask how does the Government get the authority to institute this measure and people paying it and nobody is saying anything about it?”
Quoting from the Provisional Collection of Taxes Act, Section 2,
he noted: “Tax includes all assessment, charges, duties, fees, rates, imposition or other levies, however called, the proceeds of which are payable into the Consolidated Fund as part of the revenues of Barbados.”
Calling on the Prime Minister as Minister of Finance to reverse this immediately, he said: “National Insurance can raise National Insurance contributions or whatever, but this is not a National Insurance contribution. This goes into some fund . . . . If the Government does this, it has four months in which to bring the legislation before the House of Assembly. And if they don’t do that, they have to refund the money to the people. Mind you, over the years, both administrations have gone past those four months.
“Those have been called
a validation bill. You cannot validate any illegality because when you take people’s money, you’re taking people’s money contrary to the Constitution. So you just can’t come and pass all of the legislation to make it right. All of the governments over the years have been [taking] from the people and it has gotten to this point . . . . What the law says, they don’t give back any money.”
Amendments
When contacted, Straughn said: “Cabinet has already approved amendments to the Catastrophe Fund to repeal and to make provisions for the Resilience and Regeneration Fund.” He added this was done ahead of the Budget.
“The drafting instructions have been sent to the Chief Parliamentary Counsel’s Office. Therefore, what was announced in the Budget is perfectly appropriate. Because once the drafting is completed, we will bring the legislation to Parliament which will give effect to the policies that were announced officially in the Budget on March 10.”
He further noted: “ The Provisional Collection of Taxes Act, in relation to the fact that we are collecting from employees, . . . we’re allowing the employers . . . to match the contributions of the employees. [This is] perfectly valid and, therefore, within the context of being able to bring the legislation to Parliament, then everything is in good stead.
“The Cabinet’s approval of the policy pending the drafting of the legislation is sufficient to be able to have the monies collected and paid into the NIS. I hope to be able to bring that legislation to Parliament before the end of June. That’s the working assumption,” the minister explained.
The NISSS recently published information explaining that the Resilience and Regeneration Fund replaced the Catastrophe Fund, and is aimed at supporting national recovery and resilience initiatives.
It noted that a contribution rate of 0.25 per cent is applicable to all employees and self-employed people; that employers are now also required to contribute at the same rate of 0.25 per cent, thereby matching the full amount of their employees’ contributions; and that contributions are calculated on gross wages and salaries, excluding allowances, and not subject to the NIS earnings ceiling. (MB)
