The head of the business community has warned the Freundel Stuart administration that the country cannot withstand additional taxes.
President of the Barbados Chamber of Commerce and Industry (BCCI) Tracey Shuffler also warned that economic recovery was still a long way off.
At the start of 2016 the Value Added Tax (VAT) on mobile telephone service, including voice and data, rose by 4.5 per cent to 22 per cent. It was the latest in a series of levies imposed on Barbadians by Government in an attempt to revive a struggling economy.
Minister of Finance Chris Sinckler announced a suite of new taxes and measures in his 2015 Budget presentation in June, which he said would raise approximately $200 million. These included a tax on sweet drinks and a cess on milk, and a reduction in the number of items in the basic basket of goods which are exempt from VAT.
In a prepared statement to Barbados TODAY, Shuffler complained that local businesses and Barbadians on a whole were already heavily taxed. And she contended that any additional measures would yield less than favourable returns for Government.
“We understand and would have expected tax reform to be a large part of 2015 and 2016 with a number of the 2015 budget proposals being aimed at such an effort,” the BCCI head said.
She lamented that local businesses had yet to see the “elusive” benefits of the new revenue collections agency, the Barbados Revenue Authority, saying she hoped this would change this year.
“Our hope is that the intended benefits of the creation of the Barbados Revenue Authority can be realized in 2016 for both Government and the business community though such benefits remain elusive to the private sector,” she said.
Shuffler warned that the tough times were far from over, although she anticipated some improvement in the sector’s performance this year.
She said rising tourism arrival numbers had a ripple effect on the performance of the retail sector which saw a rise in “consequent seasonal spending” last year. But she argued that the economic road continued to be rough.
“There is, however, a sense that the difficult times are not completely behind us. But hopefully the challenges are less foreboding as we look to the prospects for growth in 2016. Our expectations for growth continue to be with a few sectors related mainly to tourism, international business, and renewable energy,” she said.
The chamber president said she hoped the manufacturing sector would perform better this year, with an expectation of greater exports. She added that new growth in additional sectors was essential for a diversified economy.
“Our expectation for the increased construction activity and capacity building in exports would be the creation of additional employment in 2016.
“This is a critical part of our economic recovery for the future, and very necessary for the social fabric of the country as we enter our 50th year of Independence. New enterprises and expanded businesses will be essential to this effort and we are hopeful that unemployment will fall in 2016.”
Shuffler said the BCCI continued to work in 2015 towards promoting business facilitation and national competitiveness by working with local and foreign stakeholders to improve investment.
However, she pointed out that some of those national efforts “staggered for a number of months” last year because of industrial action by Customs officers, which she claimed continued to have lingering effects.
The BCCI head said she expected 2016 would have “its highs and lows” for the business community, but the planned year-long national celebrations for the 50th year of Independence and continued improvements in tourism would do well for business.
“We can cautiously hope that 2016 holds promise for a better year for the Barbadian business community and all citizens,” Shuffler said.
Meantime, the business community has been assured that Government would embark on a number of initiatives in 2016 that will benefit the sector.
Minister of Commerce, Industry, Small Business Development and International Business Donville Inniss said these would include changes to legislation to create a more enabling business environment.
“We have some new products coming out in the international business sector early in the year. Legislation that need to be proclaimed we will proclaim those. Some tweaks that we are going to make to existing products like the international business company to expand the options available for those involved in that sector. We are going to expand our range of tax treaties and certainly create a better environment for Barbados to attract more business here,” reported Inniss.
Inniss said he also intended to continue working on increasing exports of local goods and services, with special emphasis on the rest of the Caribbean and Panama.