The Barbados Chamber of Commerce and Industry (BCCI) has commissioned the University of the West Indies, Cave Hill, to carry out a study on the impact Government’s increased National Social Responsibility Levy (NSRL) is having on consumers.
BCCI President Eddy Abed who made the announcement Sunday on Down To Brass Tacks on Starcom Network Inc., described the NSRL as “a regressive tax”.
“There is no question that the cost of living has increased and the Chamber has just commissioned UWI to do a study on exactly how much of an increase there is and how the average consumer is spending their money,” said Abed, who is also the owner of the popular fabric store Abed’s.
“The reality is we’ve heard that there are some people who will not pay the light bill this month to pay it next month; they are putting off payment of their regular services and utilities just so that they can make the budget stretch from month to month.”
Minister of Finance Chris Sinckler revealed in Parliament last week that the NSRL had raked in $50 million in the three months since it was raised effective July 1, on target with his own expectations when he announced in the May 30 Financial Statement and Budgetary Proposals that the levy would rise.
But Abed said the NSRL has been particularly unpopular because above all else it has made the cost of living that much more higher in Barbados as compared to any other of its Caribbean neighbours.
“It’s no wonder that shrinking consumer demand has been brought about by the NSRL. One would understand that the basic salary goes to buying what is required and then if anything is left over it will be spent in the greater Barbadian economy. So, we are extremely concerned that it has made us that much more non-competitive as compared to anywhere else in the Caribbean.”
Giving an example of the impact of the NSRL and other taxes, Abed said that an item that starts off at US$100, ends up being about BB$373 by the time it lands in Barbados.
“Retailers ends up with a net margin of 20 – 25 per cent. I assure you, at 20 and 25 per cent all you are doing is paying your bills. Nobody is making money out of this, you are basically treading water waiting for better days to come,” he said.
“If one did not have to pay the NSRL the items would be about seven and a half to eight per cent cheaper, which is probably what it is in reality in the marketplace. A lot of the retailers have absorbed a part of the NSRL because it is impossible to pass on all this and expect to have a market share . . . in a market where you know the consumer has less disposable income,” Abed added.
Meantime, Managing Director of Ace HMB Hardware and Lumber Supplies Mark Roach said while their levels of import duties are not quite as high as with the garment industry, the impact is still very significant.
“The majority of Barbadian consumers realize that this new NSRL levy is going to have a very major impact on the cost of living. In many cases it has already started to do so,” he said.
“We at HMB were fortunate in that we could have cash to import large amounts of inventory when we knew of the pending tax and so we were able to avoid having to pass it on for quite a long time.”
Roach admitted to seeing increased sales last month as people shopped to send supplies to neigbouring islands affected by recent hurricanes.
But he added that, “We have seen definitely a reduction in the number of Barbadians coming in to shop and the size of the purchases they make are not what they used to be”.
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