The Barbados Coalition of Service Industries (BCSI) has described the so-called mini Budget presented by Prime Minister and Minister of Finance Mia Mottley on Monday as one of hope for the ailing economy.
Executive Director Graham Clarke said the Budget, coming just over two weeks after the Barbados Labour Party (BLP) took office, sent “a strong and positive signal to the nation and the international community that the challenges confronting the economy will be tackled head on and with alacrity”.
“The broadening of the tax net to include other informal sectors is also to be commended as this helps to share the tax burden across the population,” he said.
“Specifically, as it relates to services, the repeal of the National Social Responsibility Levy (NSRL) is expected to result in a decrease in the costs of the delivery of services as a result of the decrease to the cost of inputs. Consequently, the competitiveness of locally based firms will increase vis-a-vis externally based firms. This is expected to marginally increase service exports over the course of the financial year,” he added.
He said the introduction of Value Added Tax (VAT) on online shopping should result in the creation of a comparative cost advantage for domestic service providers relative to external service providers.
“The BCSI supports the introduction of the Trust Loan Programme (TLP) of up to $5,000 without too much red tape. This should encourage new business start-ups and the capitalization of existing upcoming service providers who struggle with access to finance. The greater the number of start-ups the greater the possibility for developing successful exporters in the future,” Clarke said.
“In addition, the move to replace road tax with a fuel tax to ensure full compliance will possibly lead to increased cost of transport for service providers. However, the BCSI shall seek clarification on this matter as to what the reduction in fuel prices would be after the repeal of the NSRL and whether the increase will be 40 cents or a net 28 cents in the case of gasoline as mentioned by the Prime Minister. “Notwithstanding, the BCSI expects this move will have varying impacts on businesses across the various sub-sectors,” he added.
Clarke said the BCSI looked forward to hearing details of phases two and three of the Barbados Economic Recovery and Transformation Plan, which, among other things, will address the issue of growth in the economy and reform of state run institutions and systems.