PM wants to make windfall tax on big businesses indefinite to ensure funding for UWI

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Prime Minister Gaston Browne
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By Orville Williams

[email protected]

If Prime Minister Gaston Browne has his way, the windfall tax applied to certain businesses in the country will be made indefinite, to provide a permanent source of funding for the University of the West Indies Five Islands campus.

The tax was introduced around the time the campus was established in 2019, and is applied to various entities – including financial institutions, telecommunications providers and the West Indies Oil Company (WIOC) – that are deemed very profitable, requiring them to fork out 10 percent of their net profits.

Back then, the government said the objective was to raise up to EC$15 million each year to support the development of the campus, but the PM revealed in Parliament this week that the tax was only meant to remain in place for a few years.

With that period of time recently expiring, Browne – who is also the Minister of Finance – put forward the Income Tax (Amendment) Bill 2022, to facilitate the renewal of the windfall tax.

“This is a tax that we introduced prior to Covid and we would have done it for about three years initially. The time would have [since] expired and we’re now extending it until 2024 – although…I’m of the firm view that we should just make it indefinite because this is a very important source of revenue.

“Perhaps the [Attorney General], in his wisdom, felt that it may not be politic to have it indefinite, but we have to understand that a university education is so important that we have to go the extra mile to ensure that we have predictable funding, so that there is no possibility of us defaulting.

“So, my recommendation – when we get to the committee stage – is to just remove the 2024 timeline and leave it as indefinite,” the PM said during Tuesday’s parliamentary sitting.

Browne also expressed confidence that opposition legislators would support the proposal to extend the tax, as well as the potential adjustment to make it indefinite. This, he said, because of its importance to the concept of nation-building, should take precedence over any political affiliation.

“If there’s another [revenue] source that we have to pursue in the future, we can always make an amendment, but … I need not emphasise how important it is for us to continue to invest in our people.

“I think this is easily one of the most significant contributions that any government would have made toward the development of our people – to ensure accessibility and affordability of a university education – and whatever we have to do to make sure that we can sustain it is absolutely important,” he added.

In addition to that development this week, the post-Cabinet report revealed that “a team from Saudi Arabia will visit Antigua from June 21 – 25 2022 to examine the UWI Five Islands expansion as planned and will advance discussions with the government and UWI for a US$75,000 facility”.

That disclosure will certainly have raised some eyebrows as far as ethics is concerned, considering Saudi Arabia’s questionable record on human rights, but the government insists that it is a matter of “separating church and state”.

“One has to be careful when one charters one’s own path and from [both] a foreign affairs standpoint and our own diplomatic approach, we maintain cordial and friendly relations with many different countries of differing political systems.

“It is not for us to judge states on the basis of our own value system,” Cabinet spokesperson, Information Minister Melford Nicholas, told media yesterday.

“We certainly have to look at what works best for us and, in the context of finding capital to fulfil our own development objectives, the fact that the Saudi Arabian government is prepared to assist us with an important venture such as the development of our education sector – that will further lead to economic and social development in our country – we see that as a separate and diverse issue,” he added.

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