Barbados approves controversial income tax law amendments Barbados approves controversial income tax law amendments

Barbados approves controversial income tax law amendments
20 Dec 2018

Barbardos’ Senators have approved a series of amendments to the Income Tax Act, despite claims that they are “unconstitutional”.

Opposition Senator Caswell Franklyn criticised the Bill’s validation clause, noting that only four months had been assigned from the date of the Budget on 11 June to implement provisional tax collection.

"After October, according to Section 5, these taxes should cease and money already taken in should be refunded," he said. "So you have taken people’s property away without the legal provision to do so. This validation clause is contrary to the constitution.”

A second Senator, Lindell Nurse, said he disagreed with the practice of backdating legislation. “Essentially we are trying to legitimise something which has expired, and I am not in agreement with making laws and backdating them as we are trying to do here,” he added.

A number of other Senators also expressed concern that some taxpayers would now be placed in a higher tax bracket. Senator Kevin Boyce told Barbados Today: “I think there should be some sort of tax incentive to those who have been hit with an increased band of payment."

General secretary of the Barbados Workers Union, Senator Toni Moore, also attested that the country was in urgent need of tax reform, especially in light of new working arrangements in which former full-time employees could be re-hired on a contractual basis.

“Many of us know of situations where governments of Barbados have engaged entities or individuals to provide contracts for services," she said. "Government saved money by not having to make the NIS [National Insurance Scheme] payments or income taxes for these people, but still had a problem tracking whether these individuals met their statutory obligations. Unless we completely overhaul our tax system, we are going to keep revisiting this issue.”

The Government said an estimated BDS$25 million (US$12.5 million) has been paid in income tax refunds during the 2017 tax-filing period, according to The Gleaner. Finance Minister Ryan Straughn added that, over the next three years, the Government would pay back the BDS$116 million (US$58 million) it owed to individuals for income tax returns during the 2008 to 2016 tax period.

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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Barbardos’ Senators have approved a series of amendments to the Income Tax Act, despite claims that they are “unconstitutional”.

Opposition Senator Caswell Franklyn criticised the Bill’s validation clause, noting that only four months had been assigned from the date of the Budget on 11 June to implement provisional tax collection.

"After October, according to Section 5, these taxes should cease and money already taken in should be refunded," he said. "So you have taken people’s property away without the legal provision to do so. This validation clause is contrary to the constitution.”

A second Senator, Lindell Nurse, said he disagreed with the practice of backdating legislation. “Essentially we are trying to legitimise something which has expired, and I am not in agreement with making laws and backdating them as we are trying to do here,” he added.

A number of other Senators also expressed concern that some taxpayers would now be placed in a higher tax bracket. Senator Kevin Boyce told Barbados Today: “I think there should be some sort of tax incentive to those who have been hit with an increased band of payment."

General secretary of the Barbados Workers Union, Senator Toni Moore, also attested that the country was in urgent need of tax reform, especially in light of new working arrangements in which former full-time employees could be re-hired on a contractual basis.

“Many of us know of situations where governments of Barbados have engaged entities or individuals to provide contracts for services," she said. "Government saved money by not having to make the NIS [National Insurance Scheme] payments or income taxes for these people, but still had a problem tracking whether these individuals met their statutory obligations. Unless we completely overhaul our tax system, we are going to keep revisiting this issue.”

The Government said an estimated BDS$25 million (US$12.5 million) has been paid in income tax refunds during the 2017 tax-filing period, according to The Gleaner. Finance Minister Ryan Straughn added that, over the next three years, the Government would pay back the BDS$116 million (US$58 million) it owed to individuals for income tax returns during the 2008 to 2016 tax period.

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

 OTHER STORIES THAT MAY INTEREST YOU

Finish tax authority to tweak income tax card system

Tax Justice Network Australia reveals country's worst tax dodger

New York introduces payroll tax system to bypass federal tax reform

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