Government’s controversial National Social Responsibility Levy (NSRL) has been identified as one of the main reasons for Barbados’ steep drop in the World Bank Doing Business 2018 Report, in which the island is ranked 132nd, down from 119th in the 2016 report. Barbados was not ranked in the 2017 report.
“Barbados made paying taxes more difficult by introducing a new National Social Responsibility Levy of two per cent on the value of products before Value Added Tax,” it said in its summaries of doing business reform in 2016/2017.
That tax was drastically increased as at July 1 this year to ten per cent.
The 2018 report, entitled Reforming to Create Jobs, compared business regulation for domestic firms in 190 economies and the data is “current” as of June 1, 2017. The report was published on Tuesday.
In its current position, Barbados now ranks well below Jamaica, which was ranked 70th overall, and trails other Caribbean countries such as St Lucia at 91, Dominica (98), Trinidad and Tobago (102), Antigua and Barbuda (107), the Bahama (119), Guyana (126) and St Vincent and the Grenadines in 129th position.
Only St Kitts and Nevis at 134, Grenada at 142, and Haiti at 181 performed worse than Barbados.
The decline began in the 2015 report when Barbados was ranked 106th, down from 91st the previous year, when Jamaica was in 94th place.
A breakdown of the information revealed that Barbados ranked 89th when it came to paying taxes, with the report stating that it took an average of 245 hours per year to make an average of 29 payments, with a total tax and contribution rate of 35.3 per cent of profit.
The country ranked 99th in starting a business, which takes an average of 15 days, while securing construction permits can take up to 442 days, placing Barbados at 155 in that category.
Registering a property took 105 days, ranking the country at 133 in this category and getting electricity took 88 days on average with a ranking of 160.
According to the World Bank report, Barbados was ranked 133rd when it came to businesses getting credit; 167th for protecting minority investors; 129th for trading across borders and 167th for enforcing contracts.
However, the island ranked an impressive 34th for resolving insolvency.
New Zealand, Singapore and Denmark were the top three ranked economies in the Doing Business 2018 report.