The Municipal Solid Waste Tax is another nail in the coffin of the small and medium enterprises (SME) sector in Barbados.
This is how chief executive officer of the Small Business Association (SBA) Lynette Holder described the controversial tax, which is due for a first payment by site owners on July 28. The final payment is due at the end of December.
In an interview with Barbados Today Holder said after polling SBA members it was found that they could not afford to pay the tax and some of them have even indicated that they have no choice but to pass on the cost to consumers.
Most of those who would have to pass on the cost are from the food and beverage industry.
“People are just outraged at this,” said Holder.
“So were we sit in the association we see this really as a further nail in the coffin of small businesses who maybe in the past five to six years we realize have been struggling and finding it even harder to keep their doors open because of the internal and external pressures, the high costs of utility and high costs of other inputs into their operation,” said Holder.
She said those in the tourism sector were already feeling the economic pinch and the tax would be “a further blow” to business.
“Overall it is really counterproductive relative to what I would think it is you want to achieve within the economy, which is facilitating growth and positioning your productive sectors that they can at least begin to realize growth. That is not what is going to happen here,” she warned.
The SBA surveyed members from the tourism industry, retail sector, agro-processors and some general service operators including caterers, all of who own the buildings from which they operate.
“What we found is that the municipal tax, as computed for these firms range form $200 right up to $5,000,” said Holder, adding that these companies were very small and were already finding it difficult to make enough to pay staff.
Holder said she suspected that one of the things that may come about as a result of the tax would be “to cut back on staff”. She said she also anticipated an increase in outsourcing.
Holder recommended that companies come together to source some products in bulk in an effort to reduce costs while maintaining the quality that consumers have become accustomed to.
“Majority of them, about 90 per cent of those members polled were actually outraged at this additional tax,” said Holder.
She said most of the small business operators said they were operating in an environment where there was very little or no growth and the forecast was that the economic climate may remain the same for the rest of this year and next year.
“So these small firms are already reeling from the economic realities of the time. Therefore to introduce another tax, is seen by 90 per cent of the persons, as an unnecessary burden and counterproductive to the overall growth and effort of trying to incentivize and to encourage economic growth. Persons see this really as counter productive,” added Holder.
Recalling that the Minister of Finance had said that he had the power to remit or refund the tax, Holder said members would have to first pay in order to be refunded and some of them simply could not afford to do so in the first place.