As Barbados heads toward its February 11 general election, Prime Minister Mia Mottley is betting that precision will beat spectacle in the battle over cost of living relief.
Speaking at the manifesto launch of the Barbados Labour Party, Mottley pledged a package of targeted cash credits and tax adjustments if re elected, while firmly rejecting calls from the opposition to slash value added tax. Her argument was simple. Broad VAT cuts, she said, do not guarantee that businesses will pass savings on to consumers, particularly the most vulnerable.
“Everybody deserves the money back in their pockets,” Mottley told supporters, warning that VAT reductions could evaporate in shop prices that never fall as quickly as they rise.
Central to the proposal is an expansion of the reverse tax credit system introduced after the BLP returned to office. Previously, the $650 credit was limited to people earning $1,500 a month or less. Under the new plan, a $750 credit would be extended to those earning between $2,080 and $2,900 monthly, a group that had not qualified before.
For Barbadians earning between $35,000 and $50,000 annually, Mottley proposed a compensatory income credit that would refund all income tax paid during the year once fiscal conditions allow. She illustrated the plan with a typical case: someone earning $48,000 a year currently pays about $2,875 in income tax, which would be returned in full.
Pensioners would see their tax free allowance rise from $50,000 to $75,000. Those who fall below taxable income thresholds, including welfare recipients and people receiving special needs grants, would receive a direct cost of living cash credit of $1,200 per year, paid monthly, quarterly, semiannually, or as a lump sum.
Mottley framed the measures as fiscally responsible and evidence based. Both the Central Bank of Barbados and Professor Troy Lorde of the Shridath Ramphal Centre have cautioned that sweeping VAT cuts could undermine fiscal stability without delivering meaningful relief.
Accusing the opposition of failing to explain the cost of its VAT proposal, Mottley said her government had listened to public frustration.
“We recognise we are in a position now to give you something back,” she said.
