Consumer rights advocate Malcolm Gibbs-Taitt is not mincing words when it comes to the recently announced hike in the National Social Responsibility Levy (NSRL) from two to ten per cent.
While calling it an “asinine” tax measure, Gibbs-Taitt today joined with noted economists Jeremy Stephen and Ryan Straughn in pouring cold water over Minister of Finance Chris Sinckler’s announcement yesterday that over 300 items in Government’s so-called basic basket of goods will not attract the tax come July 1.
Gibbs-Taitt told Barbados TODAY from the time Government reduced the size of the basket back in 2015, Barbadians have been struggling to make ends meet. Therefore, he said, the basket has been of no real benefit to consumers.
In fact, Gibbs-Taitt, the Director General of the Barbados Consumers Research Organization Inc (BARCRO), suggested that what Sinckler should have done was to put back some items in the basic basket of goods if he wanted ordinary Barbadians to benefit.
“Levy is just another word for the constant taxes that all of us will have to bear. Those who can opt out will do so and those who have no choice will just have to grin and bear it. The truth is, it has become very difficult to see all of this other than asinine,” he told Barbados TODAY.
In further criticizing Sinckler’s May 30 Budget, the consumer rights activist said “it is very obvious to me that the basket of goods was not exempted in the beginning because no mention was made of it.
“But presumably after talks with various groups he may have decided to include that.”
And with the move to exempt the basket of goods still to be approved by Cabinet, Gibbs-Taitt said he was adopting a wait and see approach to the minister’s latest announcement.
He also suggested that if Government really wanted to encourage economic growth, it would make sure people “have monies in their pockets” since this would provide for “a natural ability to spend money”.
“What the Government should be doing is resorting to the proper basket of goods before it was tampered with and see if that would be some little measure of help, especially to the lower paid in our society, of which there are many now.
“That would help but I am not so sure increasing the NSRL by some 400 per cent is a workable idea,” he added.
Gibbs-Taitt also poured cold water on the increase in taxes on fuel as well as the two per cent fee on foreign exchange transactions, arguing that they only served to make matters worse for ordinary Barbadians because he anticipated businesses would pass on those increases.
“Especially diesel, the merchants will see that as another expense that they will have to bear and will pass it on to the consumers. So that is not good,” he said.
While making it clear he was not one for outsiders telling Barbados what to do, Gibbs-Taitt said the current situation facing the country had reached a level where it stood to “decrease the value of our money” and he was wondering if the International Monetary Fund could not help to “put a stop to it”.
“Sometimes we need people from outside to bring sense to us,” he said in support of recent calls for Government to enter into a formal programme with the Washington-based financial institution.
However, Government has been stridently rejecting those calls, while insisting on homegrown solutions to the island’s economic challenges.
Meanwhile, Stephen today said he was delighted that an effort was being made to protect the most vulnerable in society, even though he was not convinced that it had gone far enough.
“I am glad that they [Government] recognize that the NSRL is regressive in nature and they are trying their best to protect the poor and vulnerable in this society, although I don’t think it is nearly enough. But for the time being, it is better than the initial proposal to just have a NSRL across the board,” Stephen told Barbados TODAY.
In a separate interview, economist Ryan Straughn supported Gibbs-Taitt’s view that even though Government’s basket of goods would not attract the tax, consumers were already struggling as a result of the Value Added Tax (VAT) that was added to some items a couple years ago.
“So really and truly the Government really isn’t doing anybody a favour by not applying the NSRL to that because it already basically punish the ordinary individual in Barbados by taxing the basic food items, moving from zero to 17.5 per cent.
“The reality is though that the cost of everything else around will still go up. So transportation, freighting and logistics, everything like that will still feed into it somewhat. So it really isn’t an ease. An ease would be to put back the VAT to zero per cent [on the basket of goods] as it was under the Barbados Labour Party for a long time,” said Straughn, who is the BLP candidate for Christ Church East Central.
Straughn also took issue with the tourism sector being exempted from the levy, telling Barbados TODAY while Sinckler had announced he was bringing a balanced Budget, the fact that the tourism sector was being given “some level of ease” made it unbalanced.
“Therefore one has to question whether the Minister of Finance really understands what he is doing and what is the true intent of the Government, because on one hand you can’t be telling the whole of Barbados that you looking to [have a] balanced Budget, but after consultation you are going to run an imbalanced Budget.
“At the end of the day you are not necessarily responding to taxpayers because ultimately, who is going to benefit from the ease to hoteliers? Tourists don’t pay [direct] taxes here in Barbados. So to the extent that ordinary people in Barbados will be impacted within the next few days ought to be of some concern to all the policymakers in the country because you are not listening to the people that actually drive the economy . . . so it is just really policy confusion,” Straughn said.