New taxes will lead to unrest

A trade union leader is predicting “industrial unrest” if the government persists with its new tax measures, while an economist has labelled them as “regressive.”

“It is going to drive employees into a situation where you may have mass protests and disruptions … The union is going to have to, at the end of the day, after it tallies up what the employees would have lost, go to the employer and say ‘we want this amount and we are not settling for less…’ What happens at the end of the day is it creates industrial unrest, strikes, pickets and confusion,” Deputy General Secretary of the Antigua & Barbuda Workers Union Chester Hughes told OBSERVER media in an interview.

He said the increase will set off a chain reaction where the employee wants an increase for the revenue lost and the employer will be seeking to recoup the revenue they lose as well. “Businesses aren’t as buoyant as they should be… where is this money going to come from. The worker is going to go to the employer and the employee is going to say he doesn’t have the ability to pay wage increases.”

During last Friday’s sitting of Parliament, Prime Minister Gaston Browne said the increase in the tax burden created by the planned increase in Revenue Recovery Charge (RRC) from 10 to 12 per cent and the introduction of an Unincorporated Business Tax will be “negligible”, with the average worker only paying $10 more in tax per month. But Hughes said the PM needs to review the proposals since they will make it harder for the working class.

“If you are going to put an additional 2 per cent on RRC, it means that the workers of this country, every single body is now going to pay an additional 2 per cent in the cost of goods, which compounds to at least 6 per cent in some cases,” he said. The trade unionist also contends that the hinted 1 per cent increase in ABST (Antigua and Barbuda Sales Tax) will also hit the pockets of workers.

PM Browne said the government expects to lose $37 million from the repeal of Personal Income Tax (PIT) and recoup the revenue loss from the Unincorporated Business Tax and the RRC. Hughes accused the prime minister of shifting the tax burden from people who can afford to pay to those who are unable.

Browne contends that the removal of PIT would change the situation where “25 per cent of the population carrying the burden of $55 million in taxes” is unfair and spreading the tax burden would be more equitable. He also said Antigua & Barbuda has one of the “worst wealth distributions in the world”.

(More in today’s Daily Observer)