Local shoppers are comparing the planned removal of the much-hated National Social Responsibility Levy (NSRL) to the lifting of a massive weight off their backs.
With the removal of the tax scheduled to take effect on July 1, customers at supermarkets across the island today said they were eagerly anticipating the end of what many saw as a burden that has been too heavy to carry.
“It was a bad tax and I am happy it is gone,” Eutavene Watkins, who was shopping at Trimart Supermarket, told Barbados TODAY as she expressed confidence that the removal of the tax would mean she would have more disposable income to spend on her family.
“The NSRL . . . has been a very painful [tax] and it had a tendency to shut down business, while you are seeing something now that invigorates business in my view,” said a former businessman shopping at Massy Stores in Rendezvous, Christ Church, while stressing that its removal would lift a burden off consumers.
The NSRL was first introduced by then Minister of Finance Chris Sinckler in September 2016 at two per cent of the customs duty on locally produced and imported goods, with few exceptions.
Sinckler had said at the time Government was seeking to raise $142.1 to help finance health care and purchase trucks for the financially strapped Sanitation Service Authority.
Less than one year later, with the then Freundel Stuart-led administration finding it difficult to steer the country out of its economic ailments, and with foreign exchange reserves sinking to worrying lows, Sinckler announced a massive 400 per cent increase in the burdensome levy, raising it to ten per cent as part of measures to close an approximately $340 million fiscal gap.
But the increase was met with immediate protest from Barbadians, including the labour movement and the private sector, who contended that it was further stifling the economy.
The Barbados Labour Party (BLP) had repeatedly promised to scrap the tax should it win the general election, and Prime Minister and Minister of Finance Mia Mottley stuck to the pledge last week despite continued concerns about the country’s financial health.
The House of Assembly on Tuesday unanimously approved a bill to repeal the levy, and the BLP is expected to use its majority in the Senate to formalize the repeal.
However, both Mottley and the head of the private sector Eddy Abed have warned Barbadians that they should not expect an immediate fall in prices at the supermarket since old stock had been subjected to the tax.
While speaking to the media at the Barbados Investment and Development Corporation (BIDC) last month Abed indicated that it could take up to five months before prices begin to fall.
“Therein lies the problem because although the NSRL may be repealed today the adjustment of the prices would only occur when the inventory is replaced. One must be realistic,” he remarked at the time.
Nevertheless, shoppers said they were optimistic that there would be an ease in the coming months.
And although Mottley also announced a series of taxes last week, including a $1.50 a day water tax and Value Added Tax (VAT) on online purchases, one person who requested anonymity said any relief was better than what pertained up to this point.
“It is a balancing process. You take from somewhere and you put on another way,” he said.
However, Channell Supermarket shopper Kerla Alfay was more pragmatic as she was adopting a “wait and see” approach.
Alfay told Barbados TODAY the tough economy had taught her to live within her means and she would continue this practice even after the NSRL was lifted.
“It will be a way for budget conscious people to keep a little more money in their pockets and some things will be cheaper,” she said.
“It is about budgeting and knowing basically what is important and knowing what you have to get monthly,” Alfay added.
Meantime, Wayne Chase was somewhat apprehensive about any benefits to the consumer from the removal of the tax, stating he did not expect a significant decrease in prices.
However, he told Barbados TODAY he was prepared “to give it time”.
Also of concern to Denita Louis, who was pleased with the pending removal of the NSRL, was the introduction of VAT on online transactions, which takes effect from October 1, even while the two per cent tax foreign exchange introduced as part of Sinckler’s austere Budget, remains in effect.
“I have a special needs daughter and there is nothing in Barbados for those type of children so you have to order in those things for them,” she revealed while adding she would be heavily impacted by the increased duties.