Minister Industry, International Business and Commerce Donville Inniss has put up a spirited defence of his ministry’s performance in the international business sector amidst growing criticism that underperformance in that sector has contributed to Barbados’ alarmingly low foreign reserves.
Inniss contends that the fall in revenue from international business in recent years is not a reflection of his ministry’s effort to grow the sector and to suggest otherwise was simply ignorant.
“There is talk about fall in revenues in the international business sector and I see some people getting excited, like politicians who want to hold town hall meetings around the issue. I would advise them to please educate themselves before they talk in the public domain on these matters,” Inniss told Barbados TODAY at the Radisson Aquatica this morning, where he addressed the opening of a regional training workshop on ISO/IEC, a joint technical committee of the International Organization for Standardization (ISO) and the International Electrotechnical Commission (IEC) whose aim is to develop, maintain and promote standards in the fields of information technology and information and communications technology.
The minister accused his critics of being disingenuous, insisting that stakeholders, as well as both sides of the political divide, had given their blessings to Government’s attempts to increase Barbados’ attractiveness to the international business community.
“The Prime Minister [Freundel Stuart], Minister of Finance [Chris Sinckler] and the [Acting] Central Bank Governor [Cleviston Haynes] said that part of the prolonged economic challenges relates to a fall in corporation taxes from the international business sector. This is absolutely true, but it is not because in recent years we have not been making an effort to attract more businesses to Barbados. It was actually as a result of an amendment to the International Business Companies Act 2010-2011 where the state agreed, supported by the Opposition Barbados Labour Party, BIBA [Barbados International Business Association] and others, that we should lower the rate of tax on certain entities based on income levels,” he said.
Inniss further explained that the sector had been faced with several challenges since Canada, one of its major source markets, changed legislation, which opened up competition from other jurisdictions.
He revealed that as a result a number of offshore companies have left the island, further denting the amount of corporation tax Government collects.
“[It is] as a direct result of the Canadian parliament decision to grant benefits to entities from countries that were afforded tax exchange information similar to what Barbados has with Canada. So Cayman Islands and other jurisdictions that were offering zero taxes to companies, once they sign the tax exchange information exchange agreement with Canada, companies in that domicile that were Canadian owned would get similar benefits to Barbados. Both Government and opposition knew then that it would result in a fall in corporation tax from the international business sector.
“So for anyone to give the impression that there has been a precipitous fall because of some failings on the part of my ministry is really not colliding with the truth,” Inniss argued.
Leader of the fledgling United Progressive Party Lynette Eastmond had earlier this month expressed concern about what she said was the absence of credible statistics on the international business sector in the Central Bank’s report on the performance of the economy for the first nine months of the year.
The country’s foreign reserves plummeted further below the 12 weeks benchmark to reach just 8.6 weeks of import or $549.7 million at the end of September, putting more pressure on the stability of the Barbados dollar.
The international business sector lost over $200 million since 2007, down from over $350 million in 2007 to approximately $100 million, Executive Director of Barbados International Business Association Henderson Holmes said recently.