The Barbados Chamber of Commerce and Industry (BCCI) has revealed plans to apply to the newly elected Mia Mottley-led administration for tax write-offs to established businesses that invest in start-up companies.
BCCI President Eddy Abed said the private sector grouping had raised the issue with the last administration but there had been no action.
Explaining that capital was a critical component to new businesses, Abed said established companies could help to provide the funds needed if there were tax incentives.
“We see our role . . . as assisting some of the capital requirements of the young start-up companies who historically have been yearning for finance by way of debt or equity, and we would like, with the assistance of the incoming Government, perhaps to look at a tax write-off that our members can use to invest in these smaller companies,” Abed told journalists at the signing today of a memorandum of understanding with the Barbados Investment and Development Corporation (BIDC).
“A lot of them are starved for finance and frankly, a good idea is only as good as getting it into the marketplace and we see our role in assisting in that,” he said.
The business executive said the BCCI was in the process of putting together a proposal to present to the new administration, making its case for a tax break in those circumstances.
“The idea is quite simple. If you are putting out venture capital you do so because you are expecting a greater return than what the banks are currently giving you and equally because it is a start-up that capital could be lost. So you need to know the downside is covered, you can write off the capital should you lose it and if you don’t the advantage or attraction is for the greater return,” he explained.
Abed said this would “free up Government” from having to provide financing for those businesses, adding that the private sector understood how to run businesses and the approximately $8 billion sitting in the banking system here needed to be invested.
The two-year agreement between the BCCI and the BIDC provides a framework for the two organizations to collaborate in a number of areas, including sharing of resources, training, promotion and market research.
It also has as its objective, the facilitation and promotion of cooperation within the business community and increased commercial activities for businesses locally and internationally.
Sonja Trotman, the chief executive officer of BIDC, said the intention was to grow local companies and increase exports.
“We know that the chamber here can use their resources and their membership and relationship with chambers throughout the region and throughout the world . . . so we can see using that kind of relationship to help us to touch base and develop relationships with persons in the international arena so that we can collect information, identify market opportunities and promote Barbadian products and services,” Trotman said.