Barbadians seem resigned to having to “cut and contrive” in order to make ends meet, as Government’s contentious National Social Responsibility Levy (NSRL) takes effect Saturday.
Uneasy shoppers said they dread the imposition of the levy, which jumps from two per cent to ten per cent, and which, along with increases in the excise duties on petrol and a two per cent tax on foreign exchange transactions, will double the cost of living, according to the International Monetary Fund.
“[The NSRL is] a heavy burden on the population. Things are hard already and it is going to get harder,” said Patricia Layne, who was shopping on Swan Street Friday.
The elderly woman said she had little choice but to be prudent when it comes to spending, adding she expected every Barbadian to do the same.
Another shopper, Claire Lucas, said she too had decided to “tighten my belt a little bit” and not “splurge as much as I did before”.
However, Lucas was worried about the fate of people in the lower income bracket, who already had a difficult time making do.
“I don’t know how they will be able to handle these new economic constraints. I think it is already difficult as it is . . . persons are barely surviving,” she told Barbados TODAY.
The levy, announced by Minister of Finance Chris Sinckler in the May 30 Financial Statements and Budgetary Proposals, raised immediate concern among virtually every Barbadian, including two members of Prime Minister Freundel Stuart’s Cabinet – Minister of Commerce and International Business Donville Inniss and Minister of Agriculture Dr David Estwick, both of whom later voted to approve the measure.
Sinckler said the NSRL was needed to help close a massive deficit, and would raise $291 million for a full financial year and $218 million for the remaining nine months of the current fiscal year.
The business community had predicted the tax measures would hurt commerce.
Friday, President of the Barbados Chamber of Commerce and Industry (BCCI) Eddy Abed said the private sector would absorb the levy until current stocks run out.
Speaking at his flagship store, Abeds Swan Street, the BCCI boss said the onerous tax would have a disastrous effect on the already struggling economy, and could force the private sector to sever staff.
“I will caution that this will reduce activity, and by extension it will put pressure on private sector companies to look at their expenses. Part of their expenses is wages and although we have asked our members to make that their number one priority to protect jobs for as long as they can, I think it would be a misnomer for me not to warn that jobs most likely in the private sector will be at risk as well,” he told Barbados TODAY, adding he expected Barbadians to spend even less from Saturday.
One of the concerns raised by many Barbadians was the potential impact on the prices of school supplies.
In a statement Friday in which he warned the tax would become “a bitter and painful reality” for everyone, economist and Opposition Barbados Labour Party candidate for Christ Church East Central Ryan Straughn said: “Come August, when back to school shopping is at its peak, we will truly feel the pain of these measures as the cost of school supplies, stationery and uniforms will increase.”
However, department store Cave Shepherd on Broad Street in Bridgetown plans to keep such prices at current levels even after the levy takes effect Saturday.
“We have had customers coming to the store purchasing items before the [levy takes] effect, which is July 1, but for our school department, which is the school clothes and Pages, we will not be increasing the prices on those items,” Store Coordinator Mark Clarke disclosed.
Sinckler has announced that some 300 basic goods items will be exempted from the levy, while the Central Bank of Barbados has announced a delay in the implementation of the two per cent tax on foreign exchange transactions.
This notwithstanding, Straughn said Barbadians should prepare for a tough ride ahead.
“Regardless of the uncertainty as to their implementation dates, the one sure thing is that these measures will wreak unheard-of suffering in the lives of Barbadians at a time when so many are already finding it extremely difficult to simply live from day to day,” he said.