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Barbados Plans Tax Hikes As Financial Center Shrinks

by Mike Godfrey, Lowtax.net, Washington
21 March, 2014

The Government of Barbados has revealed that it will introduce a number of new tax measures to lower the fiscal deficit by 2015.

Minister of Finance Chris Sinckler said during his presentation of the Appropriations Bill in the House of Assembly that the tax on bank assets will be extended to all financial institutions to raise an additional BBD6m (USD3m). The government will also increase the excise tax on gasoline by BBD0.20 to raise an additional BBD23m.

The new tax measures, which will come into effect on April 1, 2014, are designed to cut the projected deficit from seven percent of gross domestic product to 5.5 percent by March 2015. Sinckler said that, in recent years, government revenue has been shrinking while expenditure has been growing, resulting in a revenue shortfall of BBD105m. "The situation is a major worry to the government especially as it relates to the contribution of the international business and financial services sector," he told the House.

The government will also sell the Barbados National Oil Company (BNOC) to raise at least BBD70m.

Altogether the revenue boosting measures will raise a minimum of BBD123m, Sinckler said, allowing the government to close the revenue shortfall and achieve its deficit target.

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