Business must pass it on
GOVERNMENT has presented Barbadian companies with a New Year’s gift, and we are sure corporate entities will grab it with both hands. Like
Prime Minister Mia Amor Mottley, who announced the big drop in corporation tax from next year, we believe the business community, while suffering pain over the last ten years, must not keep all of the sweets for themselves, as their workers too have suffered. So have their customers and communities.
The Organisation for Economic Cooperation and Development (OECD) has been relentless in its quest to get the international community to achieve so-called tax equality and transparency. Barbadians know only too well the OECD’S actions, as a former Barbados Labour Party Administration, led by then Prime Minister Owen Arthur, fought to stop Barbados being named a tax haven.
Since then the Paris-based body has continued its mission. Some have rightly argued that its constant shifting of the goalposts against small nations like Barbados when others closer to home are not equally pursued is unfair and hypocritical.
The Prime Minister hammered home this point in the House of
Assembly last week while delivering her Ministerial Statement on the corporate tax changes that will see domestic companies paying the same rates as international business firms.
She called pressure from the OECD hypocritical, bullying, and an affront to natural justice, noting that countries set rules for others that they themselves do not adhere to.
Mottley also chided the former Democratic Labour Party Government for telling the OECD that Barbados would completely overhaul our tax system by December 31.
We agree the authorities should have engaged Barbadians on this very important matter even before making such a commitment. Having said that, Barbados has indeed been able to make the commitment to remove the distinction between domestic and international business taxes, and will therefore avoid sanctions.
This is an opportunity that the business community should use to help resuscitate the struggling economy.
There have been murmurs that with Government cutting jobs the business community is likely to do the same.
The fact that from next year companies will see their corporate tax rate fall from 30 per cent to between as little as one per cent and 5.5 per cent means companies have a major incentive to not only retain their workers but increase their pay and benefits.
In all of this, it is expected that several enterprises will be reporting much healthier profits. Having more income at their disposal means business budgets will be under less pressure, especially knowing the taxman will be taking less.
When this is coupled with the fact that Government will over the next four years be reducing the millions of dollars in arrears owed to the private sector, businesses should get some much-needed breathing space.
Corporate Barbados is being given the opportunity to resuscitate the economy, and they should not waste it.
Remember that sweet interaction between you and a sexy teller when she asked: “How would you like it?” And you would look her over with your imagination running wild.