More time to meet restructuring targets

Government has extended the time it will take to achieve several of the  targets under the four-year International Monetary Fund (IMF)-backed Barbados Economic Recovery and Transformation (BERT) programme.

This was outlined in the fifth public report of the BERT Monitoring Committee, which looks at the period ending December 2019.

During the review period the IMF completed its second review of the island’s progress under the Extended Fund Facility arrangement, agreeing that all fiscal performance criteria had been met and all structural benchmarks had been completed.

As a result, the island received a further US$48.7 million disbursement.

However, simultaneously with its review, the IMF agreed with Government’s request for modification of performance criteria for December 2019 and March 2020, the resetting of four structural benchmarks and the introduction of one new structural benchmark, the monitoring committee reported.

The committee stated that the deadline for government to conduct an actuarial review of the civil service pension system with the view to reform it had been extended from December 2019 to June 2020.

Meanwhile, the deadline for tabling a revised public pension law to enhance the sustainability of the public sector pension scheme had been extended from June 2020 to September 2020.

The report also pointed out that the deadline for government to “table legislation for a fiscal rule to enhance fiscal transparency”, had been extended from June 2020 to December 2020.

The committee said that the time for achieving the benchmarks set for the Customs Department had also been changed from December 2019 and split into two elements – either March 2020 or August 2020.

It explained that for the Customs Department to deploy staff to the exemption monitoring unit and undertake at least eight exemption verification assignments in 2019; train and deploy at least six officers in the post clearance audit unit and undertake at least eight field audits in 2019; and undertake post release verification of entries and subject at least 3,500 entries to this control by the end of 2019, would now be completed in August 2020.

The target of establishing a trust trader programme that gives defined benefits to programme members by the end of 2018 and have at least eight companies participating by the end of 2019 was extended to March 2020 instead.

Meanwhile, the benchmark of having the Barbados Revenue Authority (BRA) adopt measurable performance targets that increase on-time filing for corporate income tax and VAT from current levels of less than 50 per cent to 75 per cent over calendar year 2019 was not met.

In relation to the benchmark for Parliament to enact and amend Central Bank law aimed at enhancing the bank’s institutional, personal and financial autonomy and limit its financing of Government to short-term advances, the monitoring committee said this “remains to be addressed”.

At the same time, a new benchmark for the BRA to “execute an initial ’20 issue-based’ audits on taxpayers in the large taxpayer segment, and to develop a risk-based compliance plan to improve ‘on-time’ filing and payments compliance rate, was added with a deadline of June 2020.

The monitoring committee said it was encouraging that the external debt restructuring had been substantially completed and the Barbados credit ratings have been adjusted accordingly.

“The recent upgrade is encouraging news for eventual access to the international capital markets in the future. However, the economic growth that is a critical component of the BERT plan is yet to be achieved,” it reported.

“The committee is keen to see ‘the ease of doing business’ reforms within the public sector being implemented at a faster rate. These reforms are expected to improve the efficiency and productivity across the various sectors in Barbados, help to attract new foreign investors and facilitate the commencement of some investment projects that have not yet started. These projects are vital for increased employment and ultimately sustained economic growth,” the committee added.
marlonmadden@barbadostoday.bb