The trade union movement in Barbados had no grounds for taking to the streets over the recent increase in the National Social Responsibility Levy (NSRL), says Member of Parliament for St Lucy Denis Kellman.
Delivering the Astor B Watts lunchtime lecture at the ruling Democratic Labour Party’s George Street, St Michael headquarters Friday, Kellman pointed out that the Value Added Tax (VAT) was expected to eliminate all other taxes while allowing Government to use the reverse tax credit to create a cushion for the masses of people in the country.
However, he charged that under the VAT system, which was introduced by the former Barbados Labour Party administration back in 1997, only two agencies benefited, namely the then Government, which was able to double its revenue, and the private sector whose revenue he said increased by 95 per cent.
In fact, the outspoken St Lucy representative charged that the only group that did not benefit from the VAT was the working class.
However, Kellman said while the trade unions were made to hold strain, they never did as they did on Monday.
“While the [then BLP-led] Government was accumulating all of this money, the trade unions did not march, but as I say the Government was able to double their revenue intake and the private sector was able to get a 95 per cent increase in revenue.
“From 1993 up to 2001 revenue moved from about $378.6 million and it went to $749 million, but the workers did not benefit. What you had at that time was the Government and the private sector in bed and there was no room for the workers,” Kellman charged. His comments come against the backdrop of last Monday’s massive march against the NSRL, which was led by the Barbados Private Sector Association and the country’s four major trade unions.
This was in a bid to get Government to return to hold dialogue with them with a view to granting relief from the onerous measure, which was first introduced in 2016 at two per cent but was recently hiked to ten per cent.
However, amid all the complaints about the tax, as well as the other austerity measures, valued at $542 million, which were announced by Minister of Finance Chris Sinckler in his May 30 Budget, Kellman was adamant that the NRSL was not the worst tax in the world.
In fact, he argued that the NSRL was a far more reasonable tax for consumers and small businesses than VAT.
“The NSRL is the opposite to Value Added Tax for small business people.
“When VAT was introduced I warned the House of Assembly that the people who would suffer from VAT would not only be the consumers, but small business people. I said that whereas the importers can set their own markup, that we had something in the island at the time called the suggested retail price where they would tell you how much to sell at and they did not care what overheads you were carrying. So the private sector made the money and then you had to compete with other importers who could buy 1, 000 cases and get a better price if you wanted to stay in the market,” said Kellman, who is the proprietor of St Elmo’s Moontown Restaurant & Supermarket.
However, amid concerns that price gouging could result from the latest NSRL imposition, Kellman said the onus was on the consumer to investigate the price at which an item is sold to a retailer.
“So if the retailer is accustomed to getting a gallon bottle of water for $5.50 and then suddenly he might get it at $7, the retailer cannot sell it at $7.99 or $7.95. He now has to put on his markup now on the $7, [but] seeing that the item attracts VAT that item can easily go from $7.95 to $11,” he said.