Days after the Inter-American Development Bank (IDB) recommended that the government double National Insurance Board (NIB) contributions, minister with responsibility for NIB Brensil Rolle told reporters yesterday the Minnis administration is not considering a tax increase at this time.
He made his comments outside Cabinet on Tuesday.
“This has been a position of the IDB as well as some sectors in NIB for a while,” Rolle explained.
“NIB is reviewing all of its options but the government has not at this time looked at a position for increasing or decreasing anything.
“Basically what is happening is benefits have increased, contributions have decreased contributions have gone down and that is a consideration that the government has to at some point look at internally, so as to provide an option for the government.
“We will always ensure the funds are never bankrupt. What we will take into account is what is necessary for us to make sure that the fund is viable and is responsive to the needs of our citizens since it is our social security network. And, we are seriously looking at what we need to do to make sure it is functional and working.”
Last week, the IDB said contribution rates must increase to over 20 per cent from 9.8 per cent to prevent a pension crisis.
“Beyond the medium term, pension liabilities for which the government is directly responsible – including social security commitments, pensions and public entity pensions – amount to 160 per cent of the gross domestic product (GDP) and are underfunded,” the statement read.
“Fully funding these pensions would require increasing the social security payroll tax from 9.8 per cent to 20.3 per cent – a 107 per cent increase.”