Grenada 19 October, 1983

1983 Coup D'état - Grenada

By Everton Obi Powell

Maurice Rupert Bishop (29 May 1944 – 19 October 1983) was a Grenadian revolutionary and the leader of the New JEWEL Movement (NJM) – a party that sought to prioritorize socio-economic development, education and black liberation.  The NJM came to power during the 13 March 1979 revolution which removed Prime Minister Eric Gairy from office.  Bishop headed the People's Revolutionary Government of Grenada (PRG) from 1979 to 1983.  In October 1983, he was deposed as Prime Minister and executed during a coup engineered internally by Deputy Prime Minister Bernard Coard.

In September 1983, simmering tensions within PRG leadership reached a boiling point.  A faction within the party, led by Deputy Prime Minister Bernard Coard, tried to make Bishop either step down or agree to a power-sharing arrangement.  Bishop rejected the proposal.

In response, the Coard faction in conjunction with the PRA placed Bishop under house arrest on 13 October.  Large public demonstrations gathered to demand Bishop's release and his return to power.  The protesters numbered as high as 30,000 on an island of 100,000, and even some of Bishop's guards joined the protests.  Despite the sizable support, Bishop knew the determination of the Coard faction.  He confided to a journalist: "I am a dead man."

On 19 October, a crowd of protesters managed to free Bishop from house arrest.  He made his way, first by truck, then by car, to army headquarters at Fort Rupert (known today as Fort George), which he and his supporters were able to seize control of.

At that point, Coard dispatched a military force led by Hudson Austin from Fort Frederick to retake Fort Rupert.  Bishop and seven others, including his cabinet ministers and aides, were captured.

A four-man PRA firing squad executed Bishop and the others by machine-gunning them in the Fort Rupert court yard.  After Bishop was dead, a gunman slit his throat and cut off his finger to steal his ring.  The bodies were transported to a military camp on the peninsula of Calivigny and partially burned in a pit.  The location of their remains is still unknown.

Partly as a result of Bishop's murder, the Organization of Eastern Caribbean States (OECS) and the nations of Barbados and Jamaica appealed to the United States for assistance, as did Sir Paul Scoon, Governor-General of Grenada.  Within days, President Ronald Reagan launched a U.S.-led invasion to overthrow the PRG.

US invaded within 6 days with 8000 soldiers.  Bernard Cord and Hudson Austin were captured and sentence to death but sentences were commuted to Life.

Austin was release in 2008 and died from cancer in 2022.  The final U.S. report claims 19 killed and 116 wounded; the Cubans to have had 25 killed, 59 wounded and 638 "combatants" captured; the Grenadians to have suffered 45 killed and 358 wounded.

Violence and death surrounded Bishop family.  In 1974 his father Rupert was shot in the back and killed at by Eric Gairy Mongoose Gang during a protest.  Maurice himself was shot and killed during the 1983 execution.  His son's mother and girlfriend was killed during the 1983 execution and his only son Vladimir was stabbed to death in a Toronto nightclub at only 16.

Source / Comment

Barbados – as with the rest of the Caribbean – have inherited a command and punish economic model ...that was meant for controlling ostensibly brainless people ...of whom nothing was expected

WHITHER BARBADOS; THE CARIBBEAN MARCH OF DEBT!

By Professor Gilbert NMO Morris:

Almost 3 and a half years ago, I wrote in the NATION NEWSPAPER with a heavy heart for Barbados: here is what I said:

Professor Gilbert Morris December 13, 2013 at 7:40 PM

“The Minister of Finance for Barbados has issued a comprehensive Short Term Growth & Sustainability programme. It will not work.”

I am constrained to say I TOLD YOU SO!

The difficulty for Barbados – as with the rest of the Caribbean – is that we inherited a command and punish economic model, that was meant for controlling ostensibly brainless people of whom nothing was expected. Our innovation across the region was to add cronyism and the facilitation of lackeys at the expense of our bright young entrepreneurial minds. As such, across the region, we have produced an economic model that is scloretic, for which our politics have become the tribal art of attempting to defend obvious nonsense.

Our people know now that their chance of becoming their best selves and living their best lives is not at home, where – in Barbados as much as anywhere else in the region – successive governments have succeeded in cultivating a caste system, incompatible not only with the moral imperatives of our relevant histories, but also with the yearning, ambition and native genius of our peoples.

Barbados has lead the world in Literacy Rates, but to what purpose?

Bajans regale themselves with their comparative successes in the mark book, but where is the “silicon valley”?

Barbados needs a comprehensive rethink.

It’s future lies NOT a stale inert economic model that has produced one billionaire and a host of rent-seeking lackeys in 40-odd years.

The crisis is now in the home stretch: Barbados bond yields led a global spike and now ranks with the Republic of Congo; its debt is 135% of GDP; and its reserves have fallen to half a billion; shockingly merely 2.5 months of imports. (They need to cook with steam, for Chrissake!) Whilst it's interest payments are just over $50 million this year, Janet Yellen is likely to raise interest rates again this year. Barbados 2022 maturities have risen 146 basis points since January 20th 2017. Moreover, BREXIT impacts, crony run public institutions and domestic debt are likely to balloon next year.

A similar fate awaits the Bahamas.

HERE IS WHAT TO DO:

Start over. Rescind all oversight commissions!

Appoint My good friend Sir Courtney Blackman and 16 others to a National Steering Committee and manage this crisis for the next 6 months with a maximum of transparency, with the power to subpoena persons and papers for public testimony on all fiscal and economic issues.

Hold National Public Discussion about the current and Future of Barbados; deal with structural issues that limit or prevent Bajans from achieving their best lives in their own country.

Cut government spending now!

End all feckless liberal-minded enterprise projects, which just pay lackeys at the expense of efficiency and true achievement (Compare Singapore, which seeds parastatal corporations and then let’s them sink or swim and if they cannot produce financials they are foreclosed immediately by the Treasury).

Give EVERY Bajan who wants a business license to establish a business aimed at export, licensee fee and tax exemption for 10 years.

Move all government routine processes – drivers & business licenses, government fees and other processes to eGovernment platform immediately.

Convert all government payments to blockchain using Bitcoin or other electronic alternatives.

Place all government owned infrastructure and land into a sovereign fund, 60% held by Bajan citizens, then JV with a global strategic partner.

Eliminate the Ministry of Tourism.

Convince all CARICOM nations to withdraw from the WTO.

Open Harrison College to South Americans for Boarding school.

JV with Guyana to fund a super trade highway into Brazil, to provide a staple of Brazilian products to the Caribbean, to compete with Florida.

Set up Barbadian International Business Centre with Arbitration and commercial services for South American business.

Establish a 100 acres area as a tax free zone for international data storage and management.

The first options must be to reduce government expenses, and reduce the cost of doing business in Barbados, which has one of every tax in the history of mankind.

Reduce governments tax share of GDP to below 18%.

Use timing options for initiatives, which allows government to maximize policy options squeezing out efficiencies, then switch to more sustainable programmes.

Source

Former Prime Minister of Barbados, Owen Arthur on The Bahamas' proposed Value Added Tax (VAT)

Former Barbados PM Chimes in on VAT Talks

The Bahama Journal
Nassau, The Bahamas

The country’s proposed Value Added Tax (VAT) has to be a relatively simple structure, with only two rates, few exemptions and a relatively high threshold, according to a regional leader.

Addressing Grand Bahama’s business community, former Prime Minister of Barbados, Owen Arthur said no matter how sound the reasons are for introducing a VAT and no matter how perfect its features are in their conceptual design, “the success of the new tax will depend on the strength and sensitivity surrounding the planning and administration of its introduction.”

“To address this challenge, no effort should be spared to design and to have in place a fully competent VAT implementation unit before the VAT is introduced,” he said.

“The drafting of the legislation for the VAT also has to draw from best practice.  In particular, drafts have to make the subject of extensive discussion and refinement and the legitimate concerns of stakeholders have to be embraced and reflected in the bill to be presented to Parliament to secure strong stakeholder sense of ownership of the new tax.”

“A systematic effort also has to be made to deal with the registration of those liable to pay the tax, and to iron out the transitional problems which are sure to arise as one tax regime is replaced by another.  One major transitional issue is sure to concern the procedures that are put in to be in place to enable businesses to manage inventories as one tax regime is replaced by another.”

The three-time PM was in town to offer his opinion on the likely impact of introducing a VAT in The Bahamas.

It was under Mr. Arthur’s leadership that the VAT was introduced to Barbados in the mid-90s.

For The Bahamas, the Barbados prime minister said he could not overemphasize how important it is to establish and prove the base of the tax before making adjustments.

“A VAT on a large base that yields more revenue than required can always be adjusted and right-sized,” he said.

“But it is almost politically impossible to start with too narrow a base and to hope thereafter to expand it.  Policymakers in The Bahamas will have to contend with and to deal successfully with a number of other issues relating to the incidence and effects of a VAT.”

The Bahamas is one of the few countries that have not yet implemented the tax and the only country in the Western Hemisphere that has not joined the World Trade Organisation (WTO).

The Christie administration has however produced a white paper on the issue, looking very carefully at what Barbados has accomplished.

“For a country whose economic activities and performance are influenced, to an extraordinary degree, by its participation in the global economic arena, it is inconceivable that The Bahamas will be able to indefinitely maintain this ‘odd man out’ status where relating to a rules-based international economy is concerned,” Mr. Arthur said.

“The relevant issue therefore is not that as to whether The Bahamas should become a member of the WTO.  It is that as to how best the nation should prepare for and negotiate the terms of its participation in this critical institution and how it should do so while giving equal priority to the other reforms that the forging of such a relationship with the global economy are sure to trigger.”

In Barbados the VAT was intended to yield the same revenue as the taxes it replaced.

The former prime minister said its yield, buoyancy having been established, verified and the fine tuning of the scope of its base was subsequently undertaken.

Its introduction coincided with the implementation of its obligations as part of the Caribbean Single Market and Economy (CSME), to reduce its extra-regional tariffs from a high of 45 to 20 per cent.

He said it also coincided with the OECD Harmful Tax Initiative threat to the functioning of Barbados’ International Business and Financial Sector that helped to reduce the growth prospects of its economy.

In Barbados, the VAT was used to replace 11 forms of indirect taxes, and 44 kinds of fees as a means of raising revenue.

Despite its challenges, Mr. Arthur feels Barbados is seen as a success story.

17 July, 2013

Jones Bahamas

...we examine the experience of Barbados in its transition to value added tax (VAT) ...and look at how we can apply those lessons to The Bahamas ...Finally, we present an argument for why the tax discussion should ultimately be extended to include modest corporate taxes

Value added tax, part 2

CFAL Economic View

Nassau, The Bahamas

Last week we examined the need for a new tax system in The Bahamas and gave an example of how value added tax, or VAT, would be calculated in practice.  In this article we examine the experience of Barbados in its transition to VAT and look at how we can apply those lessons to The Bahamas.  Finally, we present an argument for why the tax discussion should ultimately be extended to include modest corporate taxes.

In an excellent article recently published in The Tribune titled “Barbados’s Lessons for The Bahamas over VAT”, Dr. Nikolaos Karagiannis of Winston-Salem State University presented a detailed overview of the process that took our southern Caribbean neighbor to its new tax system.

VAT was introduced in Barbados at the beginning of 1997 at a standard rate of 15 percent (it has since been raised to 17.5 percent).  Among the reasons cited for its choosing to implement VAT was to reduce the complexity of the country’s indirect tax system and to reduce the high level of duties and taxes on imported goods.

Serious discussions on tax reform began in earnest when Barbados underwent stabilization and structural adjustment under the International Monetary Fund (IMF) in 1991.  In order to coordinate the extensive work of implementing a VAT, Barbados established a VAT Implementation Unit (VIU) in 1993.  In January 1994, it entered a technical cooperation agreement with the Inter-American Development Bank (IDB).  Under the agreement, loans were allocated for the design of the VAT system and to bolster the Customs and Excise Department.

When the Owen Arthur administration came to office in 1994, the implementation of VAT was postponed to mid-1996 while research continued on estimating the impact of the tax on revenues, prices and the productive sectors.

The VIU started public relations outreach programs in May 1995, including the release of pamphlets and booklets, targeting four main target audiences: the private sector (retailers, manufacturers, importers and managers); the government sector agencies involved in the administration of the system; members of the general public (consumers) and finally the school system.  The VIU presented at workshops, seminars, as well as via television and radio to further educate the public and business community.  The major features of the new act were passed by the Barbados House of Assembly in September 1996 with effect on January 1, 1997.

The Bahamian context

Will Bahamians comply with a new and seemingly complicated tax?  Many are skeptical that we can effectively get companies and individuals to forward the correct amount of tax to the government when we struggle to collect existing property taxes.  As reported numerous times before, our government is owed some $400 million in past due property taxes according to the auditor general; much of that amount will probably never be recovered.

However, the reality may prove to be less problematic: only persons/businesses of the size and capability to adhere to good record-keeping (as measured by annual gross sales) will be included in the VAT system.  Around the Caribbean region, this minimum threshold is TT$200,000 in Trinidad and Tobago (approx. US$30,000), JM$144,000 in Jamaica (approx. US$2,000) and BD$80,000 in Barbados (US$40,000).  Given the higher average per capital GDP of The Bahamas, one can reasonably anticipate that our exemption threshold will be much higher than the rest of the Caribbean.

The Barbadian government was equally concerned with tax avoidance and evasion.  Only those traders who were registered, and who displayed a certificate of registration, were legally authorized to charge VAT on the taxable goods and services they were selling.  On the other hand, those traders who were not registered were paying VAT on the goods they were buying, but were not legally authorized to charge VAT on the goods they were selling, thereby squeezing their profits.

No doubt Bahamian business culture will need to be transformed.  Compared to Barbados, which already had a strong tax framework and a history of paying taxes, this nation is starting from the opposite spectrum in terms of tax familiarity and compliance.  The principle challenge for the business community will be record keeping; many companies will need to hire book-keepers or accountants while upgrading their point of sales or POS systems.  Ultimately we will need to force compliance by tying it to the renewal of business licenses, alongside rigorous and impartial execution of the law by the newly created tax authority.

The move forward

As the Bahamian economy is a predominantly services-driven one, the real challenge for our policymakers is to introduce a VAT system that can achieve economic, fiscal, social and developmental objectives, while avoiding any adverse effects on tourism and financial services.  As one example, VAT in Barbados was applied at a concessionary rate of 7.5 percent (now 8.75 percent) on accommodation in hotels, inns and guest houses.  The government will need to decide very carefully which goods and services would be zero-rated and therefore exempted to make sure that VAT is neither regressive, nor penalizing those who are at the lowest levels of income.

Beyond VAT, how do we get the greatest mileage out of the many tax information exchange agreements, or TIEAs, that our jurisdiction has signed?  One of the stated goals of the Bahamian financial services industry is to see companies locate their head and subsidiary offices within our shores.

Would that be an easier sell if we had a tax regime that allowed foreign companies to offset taxes paid in our jurisdiction when repatriating income?  For example, Barbados has a number of double taxation agreements, or DTAs, that are extremely favorable for certain types of investors.  These agreements promote cross border trade, avoid double taxation and prevent tax evasion.

As a result of its 2000 DTA treaty with China, Barbados has emerged as the leading jurisdiction for offshore wholly foreign owned enterprise (WFOE) holding companies in China.  Under existing law, payments of dividends by a WFOE to its foreign owners are free of Chinese withholding tax.  Payments of interest to foreign lenders are subject to withholding at 20 percent, typically reduced to 10 percent under applicable tax treaties.  However, where a taxpayer qualifies for benefits under the Barbados-China treaty, the tax rates are reduced to five percent for dividends and 10 percent for interest.

The Bahamas should be able to compete in this space with the proper tax structure.  The current tax debate is an ideal time to examine the merits of corporate tax as a boost to our competitive advantage in an era where being a zero-tax country is now a liability.  This would allow the Bahamas to obtain tax income from foreign companies operating here at modest rates of 1.5 percent to 2.5 percent without increasing their overall tax burden since, by the DTA, the tax would be shared by our treasury and that of the home country.

Even as we move to a new tax system, we stress that the government will still need to be vigilant in controlling its spending and getting its fiscal house in order. This is one reason why the so-called Tea Party in the United States is so adamantly against any form of tax increases, including any overhaul of the tax code which increases efficiency and as a consequence increases collection.  Instead, it feels the need to “starve the beast”, as governments’ natural inclination is to spend more than whatever revenue it takes in.

Referring to Barbados one last time, that country has a 17.5 percent VAT, 20 percent to 35 percent personal income taxes, 12.5 percent withholding on income and dividends, 15 percent to 25 percent local corporate taxes and import taxes on vehicles, spirits, tobacco and petroleum products. Nevertheless, they still had a 2010/2011 central government deficit of 8.5 percent of GDP and total government debt over 110 percent of GDP.  Clearly, getting the tax policy right is still only one side of the government’s fiscal equation.

CFAL is a sister company of The Nassau Guardian under the AF Holdings Ltd. umbrella.  CFAL provides investment management, research, brokerage and pension services.  For comments, please contact CFAL at: column@cfal.com

Jul 11, 2012

Value added tax, part 1

thenassauguardian

REDjet, Protection, The CSME and the region's scepticism about the usefulness of CARICOM

REDjet, Protection And The CSME

jamaica-gleaner editorial


In the Revised Treaty of Chaguaramas, at Article 134, Caribbean Community (CARICOM) governments made it clear that "efficient, reliable (and) affordable transport services" would be essential if the region was not only to theoretically transform the Community from a free trade and functional cooperative group to a single market and economy, but to consolidate the process.

At Article 135 (1)(f) of the same treaty, Caribbean governments pledged "the removal of obstacles to the provision of transport services by nationals of the member states ... ."

'Nationals', in this context, refers not only to individuals, but corporate persons registered and resident in member states of the Community.

We draw attention to these facts, given the ongoing dispute regarding the operation of REDjet, a Barbados-registered and domiciled low-cost airline, whose Irish principals, and the Barbados government, believe - unless they have very recently changed their minds - are being discriminated against by Jamaica and Trinidad and Tobago.

We must confess that in the absence of clarity on the part of Kingston and Port-of-Spain, it all smells rather fishy to us, and in that context ... we would call into question our Government's declared commitment to the free market and competition, as well as the operation of CARICOM as a genuine single market.

CARICOM has, of course, struggled with a coherent and consistent aviation policy for the nearly 40 years that the Community has been in existence.  Indeed, Caribbean nationals often complain of the logistical difficulties and high cost of travelling within the region and the limits these have placed on the conduct and growth of business, including tourism.

protecting carriers

The rigidities that regional governments maintained of air services were largely to protect state-owned carriers, such as Air Jamaica and Caribbean Airlines (CAL), the Trinidad and Tobago carrier that used to be called BWIA.

But these carriers lost huge amounts of money, which the taxpayers of most of the countries can no longer afford.  For example, in the decade until it was finally unloaded just over a year ago, Air Jamaica cost Jamaican taxpayers more than US$1 billion, or nearly J$90 billion.

This brings us back to the REDjet issue.  When Air Jamaica was finally divested, it was acquired by CAL. Under the arrangement, the Jamaican Government received 16 per cent of CAL, but is insulated from capital calls.  There is, on the face of it, reason for Kingston and Port-of-Spain to protect CAL.

REDjet, which operates two MD82 aircraft, first wanted to set up in Jamaica, but was stonewalled.  It moved to Barbados, which has no state-owned carrier.

Several months ago, REDjet announced it would inaugurate its cut-rate flights to Jamaica, Trinidad and Tobago, and Guyana, but has had regulatory difficulties in Kingston and Port-of-Spain.

Now, Jamaica and Trinidad and Tobago say they have safety concerns over REDjet, which the airline has to address before receiving the green light.  These concerns are new to the company and the Barbadian authorities.

If these countries have genuine safety concerns, it is in the interest of the region that they be resolved.  But the process has to be transparent, which this has not been.

Indeed, it is behaviour like Kingston and Port-of-Spain's that has helped to drive the region's scepticism about the usefulness of CARICOM.

The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner.  To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words.  Not all responses will be published.

June 19, 2011

jamaica-gleaner editorial