Concerns by local manufacturers over the point at which the new two per cent National Social Responsibility Levy is being applied, have been resolved.
This was revealed this morning by Minister of Finance Chris Sinckler during a talk show radio programme as he sought to address some of the major challenges facing authorities in the application and management of the various taxes.
Last week, representatives of the manufacturing sector complained that while their products or raw materials were exempted from the levy on arrival at the Bridgetown Port, it was imposed on the inputs at the other end of the production process.
The tourism, agricultural and manufacturing sectors are exempted from the new tax, revenue from which will finance the island’s health care.
“These things have very specific designations and definitions . . . so if for example I am importing fish and I import whole fish and sell it to you without doing anything, other than putting it in a package, I have not manufactured anything,” Sinckler said as he sought to separate a manufactured product from a non-manufactured one.
“If I take that fish and I transform it into fish patty or fish burger then I have produced something out of that fish. It has undergone a transformation process. Now that would be considered to be an input because it is an input into your processes, into your manufacturing process that produces an item that is substantially different from what I would
have imported,” the Minister of Finance explained.
He said manufacturers were concerned coming out of a meeting he held with some of them, but according to him, that matter has been solved.
Referring to a process he called cascading, Sinckler said one person’s finished product may be another’s input.
For instance, he explained: “I may import wheat. Wheat is a raw product . . . input into making flour. X person makes flour and sells it to you. Now the flour, if sold to a supermarket is a finished product because it is put in a bag and is put on a shelf, a price goes on and the consumer buys. But if it is sold to you that owns a bakery and you take the flour and turn it into a sandwich loaf, you have manufactured something.”
He explained therefore that the finished product to the supermarket was the input.
“So if the input is to be freed of the levy, then commonsense would have to prevail or logic would have to prevail that the finished product as your input should be free of the duty . . . of the levy,” emphasized Minister Sinckler.