“The move towards taxing tourism heavily is a reversal of an important policy,” Arthur said during a speech titled The IMF and the Caribbean: New Directions for a New Relationship.
Stating that he had deliberately stayed silent on the matter for some time and that he was not about to be critical, Arthur went on to detail his objections, especially on taxes on the island’s main source of income, the tourism industry, according to Barbados Today.
“There are things that I did as Minister of Finance that I thought were the right things to do. When I inherited the Ministry of Finance there were about 11 different ways of collecting indirect taxes. I said I am going to abolish them and collect taxes via VAT [Value Added Tax]. That is what I did and that helped. I don’t believe that you should have a system where you have multiple taxes and little bits and pieces of taxes, and taxes upon taxes,” Arthur said.
He went on to express his disagreement with going back to the days "where you have a large number of different ways of collecting an indirect tax. I do not believe that you should have taxes on exports. The Value Added Tax was introduced in Barbados to allow us not to have taxes on exports and investment, but taxes should fall on consumption.”
During her mini-budget planning in June, Mottley announced a series of taxes including three different rates of a new room tax on hotel accommodation, a 2.5 percent product development tax on direct services in the tourist industry and a 10 percent tax on the shared economy.
As of October 1, a new international Airline Travel and Tourism development tax amounting to USD$70 will also be imposed. Travel within the region will attract an additional levy of USD$35.
Arthur argued to the contrary, saying that development and growth are possible through the expansion of an existing enterprise. He suggested that the new taxes would make this more difficult.
- Countries: Barbados