(Barbados Nation) Barbadians were on Monday administered one of the most bitter doses of economic medicine since the 1991 crisis by new Minister of Finance Chris Sinckler.
Levying broad-based increases in taxes and user-fees, while at the same time offering significant support to several business sectors to help keep people employed and to pull the country from its economic hole, Sinckler said the aim was to reduce the fiscal deficit which ballooned from Bds$396.9 million in 2008/2009 to Bds$712.9 million in 2009/2010.
The bitterest of the taxes was an 18-month increase in value added tax (VAT) from 15 per cent to 17.5 per cent, with Government expecting to raise BDS$124 million.
Bus fares, which for 19 years stood at BDS$1.50, will go to BDS$2 from January 1, 2011, adding $8.4 million to the state-owned Transport Board.
Allowances
And as the Opposition members grumbled in the background during Sinckler’s first Budget speech in the House of Assembly, he announced too, that long-standing tax-free allowances for travel and entertainment that boosted the salaries of many in the middle-class would be eliminated.
Also impacting this group was the removal of tax allowances for credit union savings and mutual fund investments. Sinckler said these two measures would save Government BDS$34 million.
Another painful measure was the 50 per cent jump in the excise tax on gasolene. This is to raise BDS$22.7 million.
From April 1, Barbadians who want their prescriptions filled at private pharmacies will have to pay user-fees. These drugs are free under the national drugs programme administered by the Barbados Drug Service.
The fees range from BDS$5 to BDS$12 for medicine that cost up to BDS$40. Above BDS$40, the fee will be 30 per cent of the cost.
Increases were also levied on Immigration services.
But as harsh as the tax measures were to swallow, Sinckler insisted the alternatives would have been “ten times more painful”.
