Chief Executive Officer of the Small Business Association (SBA) Dr Lynette Holder has issued an early call to the new Mia Mottley-led administration to move with haste in tackling a number of issues affecting operators in the micro, small and medium-sized enterprises (MSME) sector.
In fact, pointing out that businesses continued to buckle under the pressures associated with the high cost of doing business in Barbados, Holder called on the Government to review the burdensome Garbage and Sewage Contribution (GSC) levy with a view to providing an ease.
She said chief among the areas that should be addressed with urgency are government procurement procedures, taxes and high fuel costs, the continued lack of ease in doing business and challenges associated with small firms accessing capital.
Pointing out that the MSME sector was still reeling from the onslaught of the COVID-19 pandemic, Holder said the urgency in tackling those and other issues were even greater, adding that there was need for policies that will help prevent more businesses from going under.
“On top of the fuel and the sewage tax that further compound the high cost of doing business, tangential to these issues are the two per cent foreign exchange fee,” said Holder, who called for a date to be set to phase out the two per cent tax on foreign exchange transactions.
“It has had a crippling effect on small firms in the retail sector, distribution sector, small manufactures and those who have to procure certain inputs for their business from foreign markets. These costs are compounding the cost of doing business.”
The SBA boss added that “at the end of the day, we need to have a credible plan to tackle the high cost of fuel because fuel is an input for many small businesses”.
A series of SBA polls during the association’s 2020-2021 financial year revealed that the GSC levy and fuel costs were continuing to have a negative impact on the operation costs of businesses across the MSME sector.
While dozens of businesses were started over the past two years, it is understood that scores of micro and small firms had to close their doors during the height of the pandemic.
In relation to government procurement, Holder acknowledged that a new law was being introduced to allow for greater ease and transparency.
However, she said: “We are calling for the necessary regulations now that would at least allow for setting aside a percentage of government procurement to small firms. We are not satisfied as a sector that small businesses are being given enough of a share of government’s procurement of goods and services.”
“Then obviously, we have to address the issue of doing business. We still have too much bureaucracy that exists in our country relative to doing business. You don’t have to go to the global competitiveness reports to know,” said Holder.
The SBA CEO also questioned whether the Mottley administration was serious about helping the productive sector survive and grow, as she compared the stimulus provided to small firms during the height of the pandemic to what was made available to the tourism sector.
Early last year, Parliament approved a supplementary budget of $3.5 million to assist more than 7,800 registered small businesses during a two-week lockdown period. Some $300 million was made available to the tourism sector under the Barbados Employment and Sustainable Transformation (BEST) programme.
Holder told Barbados TODAY that, to date, some SBA members were yet to benefit from the stimulus package despite submitting applications from inception.
“The truth is, some businesses have closed, some have tried to reengineer their operations, and some have tried to diversify into different areas of economic activity. So, there have been various responses but I think we have to do a lot better relative to facilitating business,” she said.
“When you can put $300 million behind tourism but you put behind small business $20 or $30 million, then you are not serious. So, with all the other things I talk about you have to invest . . . you must be prepared to put a considerable amount of capital behind this sector and then marry that to financial literacy and business development support.
“We need to unlock financing urgently so that small firms and micro firms can benefit,” Holder added, while calling for laws governing the credit union movement to be changed to allow for small firms to benefit more from such institutions.
She also called for measures to facilitate number portability and greater regulatory framework support for e-commerce to allow for more trading across borders. [email protected]