Bridgetown.
Professor of Economics at the Cave Hill Campus of the University of the West Indies Dr Michael Howard, is advising the Government of Barbados against a tax cut stimulus package for the private sector.
Last weekend the Barbados Private Sector Association (BPSA) in a press statement complained that they were owned almost $50 million in rebates, refunds and other payments by the Government.
This statement was countered by Minister of Finance Chris Sinckler who told the media that members of the BPSA owes the Government $79.6 million in corporation tax; $361 million in VAT, $153.8 million in land tax arrears and $291 million to the National Insurance Scheme.
"In this scenario of tax evasion and arrears, the private sector is calling on the Government to stimulate consumption to bring about economic growth", Howard told Trakker News.
"It is imperative that Government impose tough penalties on businesses and individuals to reduce these high levels of tax evasion, and avoid the tax cut route as a fiscal stimulus to consumption", he added.
Howard warned that tax cuts would wreck the Barbadian economy by depleting its foreign reserves, without necessarily guaranteeing increases in employment and increase tax evasion as some businesses and individuals try to prop up their own depleted cash reserves.
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The senior UWI official has also advised the Goverment aa stimulus package for the for the private sector despite it being suggested by several economists
