The umbrella body for the credit union movement in Barbados is strongly opposed to Government’s proposal to tax their assets, and has called on Minister of Finance Chris Sinckler to rethink the decision.
The Barbados Co-operative & Credit Union League Limited (BCCULL) said in a statement issued to the media that it was caught off guard by the announcement.
Sinckler said on Monday, during the Estimates Debate, the existing tax on bank assets would be extended to all financial institutions, starting April 1.
“What is unfortunate is that there has been absolutely no consultation with the credit union sector in Barbados regarding such a retrograde policy measure,” said the credit union league, adding that it was concerned about “the trend of the policy measures implemented by Government since fiscal year 2010/2011”.
It said the tax incentives that credit union members valued since 1997 were removed in accordance with the 2010 Budgetary Statement and should have been a temporary measure for an 18-month period. However, to date those tax incentives have not been restored.
“The fiscal measure that credit unions will be required to pay tax on their assets is a double blow in a three-year period,” said the movement in
the statement released by its general manager Anthony Pilgrim.
“This is especially so given the important role credit unions play in cushioning the harsh impact of recent policy measures. The series of policy measures conceptualized by the current administration are an assault on the credit union movement in Barbados to say the least,” it said, adding that it is testimony that the high ranking political officials do not appreciate the role that credit unions play.
The BCCULL said taxing credit unions should not be seen as a viable alternative to correcting fiscal challenges that confronted the island.
“The [BCCULL] wants to make it abundantly clear that it is vehemently opposed to this latest fiscal measure, which stands to have a significant impact on credit unions and their members. This measure will take substantial resources out of the hands of its members and the credit union system. The league is there calling on the minister to rethink this policy measure”.
In addition, the BCCULL said it was “dissatisfied and disappointed” that after several years of lobbying government on the issue of deposit insurance for credit union members, it is still not a reality despite announcement in 2012 that measures would be put in place to make it a reality.
“There is no acceptable reason why credit union members should continue to be placed at a substantial disadvantage by not having access to the financial safety net, as do customers of commercial banks and finance companies,” it said.