The Barbados government Wednesday outlined a series of new fiscal measures aimed at 'staying the course' in turning around an ailing economy.
Prime Minister Mia Mottley delivering the 2019-20 budget presentation, told Barbadians the island has 'left base camp and are climbing the mountain.
'Today, we are preparing to depart stabilization and moving on to the paths of growth and transformation,' she said.
In a presentation lasting more than five hours, she said that the taxation policies of her administration, which came to power in May last year, would be a balance between direct versus indirect taxation; taxing income versus taxing wealth and consumption and sharing the burden of taxation across businesses and households and locals versus foreigners and tourists.
In this regard, when we come to income taxation, we have to balance a set of tax tools that includes the rates; the treatment of allowances and the use of credits. Ultimately, the aim is to protect the most vulnerable groups, using the ability to pay criterion, while allowing for more disposable income to fuel growth.'
Prime Minister Mottley said currently, persons earning up to BDS$18,000 (One Barbados dollar=US$0.50 cents) per annum are entitled to a Reverse Tax Credit of BDS$1,300, noting that there's a group of persons who do not pay income tax but who nevertheless are affected by the burden of value added tax (VAT) in the country. She said these are persons earning between BDS$18,000 and BDS$25,000 per annum.
Mottley said beginning for the income year 2018, the government is offering protection to an additional 7,000 individuals at a cost of nine million dollars, noting that this is the direct result of raising the qualification income to BDS$25,000, which is effective immediately.
She said that once an individual within this income bracket submits the income tax form for the income year 2018, that individual qualifies for the first time for the Reverse Tax Credit and that the money would become available around September of this year.
'Therefore, Mr Speaker, immediately based on income year 2018, we are adding the nine million dollars to the existing allocation of BDS$11.3 million for thousands more Barbadians who earn BDS$18,000 or less. Overall, the reverse tax credit is putting just over $20 million back into the hands of low income Barbadian workers.'
Mottley said that the government would continue to provide a BDS$25,000 personal allowance for all taxpayers and that...