The Barbados Chamber of Commerce and Industry (BCCI) says it is “gravely concerned” about the pace of this country’s economic recovery, and it is extremely jittery about the possiblity of any new taxes.
Echoing many of the concerns expressed yesterday by the Barbados Private Sector Association (BPSA), the BCCI today warned that its membership could not survive any additional taxes.
However, based on the latest report of the Central Bank Governor Dr Delisle Worrell, BCCI President Tracey Shuffler said she anticipated that “temporary” taxes may have to be extended, considering “the ongoing failure of the current fiscal adjustment plan to meet set targets”.
“The business community’s fear is that temporary taxes may be extended, further dampening demand and preventing a much-needed rebound in this economy,” the BCCI president said.
While the immediate temptation may be to raise taxes, the Chamber today suggested that Government should focus its attention on more efficient tax collection.
“Our members are in many cases suffering terribly from the effects of restricted cash flow and while the Governor’s report seems quite optimistic, his enthusiasm is not being borne out by economic activity and employment levels among members of the business community,” added Executive Director of the Chamber Lisa Gale.
She noted that the unemployment rate had moved from 11 per cent to 13.2 per cent, which she said was worrying “as it did not fully reflect the level of joblessness and underemployment being a reported average, rather than an up-to-date indicator”.
Instead of raising taxes, the BCCI is also encouraging Government to pay outstanding Value Added Tax refunds to the business community, saying the positive impact of such a move on the economy should not be underestimated.
At the same time, it wants the Freundel Stuart administration to settle long outstanding balances owed to the private sector for goods and services, as a means of adding some stimulus and job creation potential.
The Chamber also suggests that more support needs to be given to the foreign exchange earning sectors of tourism, international business, export manufacturing and renewable energy, adding that such support should be reflected in the Government’s upcoming budget.
As for the Central Bank’s report, the Chamber said it had seen no encouraging difference between Tuesday’s release and the previous quarter’s.
“Like the previous quarter’s report, this report indicates overall continued economic malaise and sluggishness in the areas of revenue generation, expenditure reduction and ineffectiveness of parts of the growth strategy,” the Chamber pointed out.
The BCCI also expressed the view that projected deficit target of 6.6 per cent of GDP was a long shot, considering that only a quarter of the goal had been achieved at the half way stage of Government’s 19-month fiscal adjustment programme.
“We expect this [quarter] to be a less responsive period for the fiscal adjustment programme. It is a traditionally softer quarter and to see the fiscal deficit closed by only 15 per cent of the projected reduction up to the half-point of the fiscal year, even with best efforts, we expect the 6.6 per cent of GDP target will be elusive,” Shuffler said.