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Barbados Budget Increases Tax Burden On Lower Income Taxpayers, Says E&Y

by Amanda Banks, Tax-News.com, London

31 October 2002

International accounting firm, Ernst & Young has warned that as a result of changes announced in Barbadian Prime Minister, Owen Arthur's budget, lower- and middle-income earners will actually be worse off, despite forthcoming personal income tax cuts.

In its recently released budget analysis, Ernst & Young explained that this is because although the changes signalled in the budget are set to reduce the tax burden for low income taxpayers slightly, increases in NIS contributions will hit this section of Barbadian society particularly hard.

'The measures outlined in the budget do not themselves necessarily bode well for those lower- and middle-income persons who had expected more from the Minister of Finance's budget,' the accounting firm observed this week, adding that:

'The increase in the contribution to the National Insurance Scheme will mean that by income year 2006, the NIS contribution will rise from 8% to 10%.'

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