'Every Bajan A Winner' In BLP's 2003 Manifesto

by Amanda Banks, Tax-News.com, London

16 May 2003

The 2003 election manifesto of the Barbados Labour Party was unveiled this week by Prime Minister Owen Arthur. Entitled 'Every Bajan a Winner', it contains several pledges on taxation, which the party has committed itself to reducing on several fronts over the next few years.

"Insofar as Barbados will function as part of a Caribbean Single Market and Economy (CSME) after 2004, we must structure our tax system to be the most competitive in the region, and to make Barbados the preferred business centre in the Caribbean," the manifesto stated, continuing:

"After 2005, our tax system must accommodate removal of import duties in accordance with FTAA, European Union, and WTO trade agreements. Our fiscal system must also feature attractive incentives to spur personal initiative, promote high levels of savings and investments, and provide fair and reasonable returns as stimuli to private investment."

Major tax developments planned by a future Owen Arthur administration include proposals to:

- Increase personal allowance from $15,000 to $25,000 over four years by annual increments of $2,500, starting in income year 2004.

- Reduce the basic rate of income tax from 25% to 22.5% in 2003 and to 20% in 2004.

- Reduce the top rate applicable to taxable income in excess of $24,000 from 40% to 37.5% in income year 2005, and from 37.5% to 35% in income year 2006.

A BLP Government will review the personal income allowance in 2007, and increase it as financial circumstances allow.

The manifesto continued: 'We amended the Income Tax Act to reduce the Corporation Tax from the current 40% to 25%, by 2006. The next stage in our reform of Corporation Tax will be the removal of the differential between rates paid by domestic enterprises and those in the International Business and Financial sectors.'

'Under the Small Business Development Act introduced by the BLP, small businesses pay tax on profit at a rate of 25%. The next BLP administration will reduce the Small Business Tax Rate to 20% when the General Corporation Tax rate reaches 25% in 2006.'

'To encourage home building, we will establish a special corporation tax rate of 20% for firms engaged in housing construction.

'To fulfil our obligations under the FTAA and WTO agreements, Barbados will, from 2005, begin phasing out import duties. This will be a major tax adjustment, as import duties currently range between 20% and 45%, and yield $170 million in revenue.'

'To propel our thrust to make Barbados a First World society, we must ensure that information technology is available to all Barbadians, as a learning tool and as a business option. To this end, a BLP Government will remove the VAT on computers and computer supplies.'

The election manifesto continued:'We will exempt the first $125,000 in property value from payment of land tax, place a ceiling on the value on which land tax will be charged and permit property owners to pay annual land tax charges in quarterly instalments.'

'A BLP Government will reduce the property transfer tax vendor rate from the current 10% to 7.5%. Whereas existing legislation provides for payment of property transfer tax on leases in excess of one year, we will amend the Property Transfer Tax Act and Stamp Duty Act to exempt leases of up to 25 years.'

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