Minister of Industry, International Business, Commerce and Small Business Development Donville Inniss wants critics of Government to present a viable option to the dreaded National Social Responsibility Levy (NSRL).
Speaking to Barbados TODAY at the weekend, the outspoken Inniss took particular issue with recent comments made by the President of the Chamber of Commerce and Industry Eddy Abed, who
reported last week that three months after the Freundel Stuart administration increased the tax from two per cent to ten per cent, Bridgetown businesses have since experienced a drastic decrease in sales, with car companies among the worst hit.
In an interview with Barbados TODAY, Abed also repeated the business community’s previously stated position that while Government had promised it would not lay off any more public servants, the jobs of private sector workers were being placed in jeopardy by the NSRL.
“Although the minister, by adding the NSRL assured that public servants won’t be going home, he has shifted that responsibility to the private sector. We are seeing many of our members in the process of about to send home staff and closing branches and downsizing. This wasn’t intended, [but] we can’t employ people with a tax so burdensome.
“From the chamber’s point of view, many of our members have also informed us that they have seen a tremendous fall-off in business. Those selling cars have said that July, August and September were the worst months for them. Sales were down 50 per cent and this has made the cost of living much higher,” the businessman explained.
However, Inniss believes it should not have come as a surprise to anyone, least of all businesspeople, that the cost of goods and services has increased.
“When the NSRL was increased in the last Budget. I think all of us, certainly I would have made it clear that [it] would have resulted in an increase in the cost of goods and services in Barbados,” he said, stressing that “all things being equal . . . any increase in taxes would result in an increase in the cost of goods and services”.
Noting that the measure was designed to dampen demand for foreign exchange and to assist in raising the necessary revenue to reduce the country’s deficit of six per cent of Gross Domestic Product, Inniss further pointed out that “some well-defined targets were outlined, and the Minister of Finance [Chris Sinckler] did indicate the amount of money he expected to collect from the levy.
“There was also an indication as to where the money will be applied,” Inniss added.
Just last week Sinckler reported that the NSRL was responsible for raking in $50 million since July with more money expected to come for the period with officials still said to be adding Value Added Tax revenue to that amount.
In defence of the NSRL, Inniss, who had initially raised concern when Sinckler had announced the tax hike back in May that the levy would result in a rise in the cost of living, has accused Abed of stating the obvious as far as the levy was concerned.
“The critics, however constructive they attempt to be, ought to be addressing what other measures can be implemented to address the issues of the deficit in Barbados, “he told Barbados TODAY, while demanding to know “what are the options?
“Quite frankly it would be a reduction in public expenditure which should mean one of the ways of doing this is to reduce the size of the public sector by extension reducing the size of the payroll,” the Minister of Commerce warned, adding that the sale of state assets and state-owned enterprises would also occur.
Inniss also weighed in briefly on the suggestion of debt restructuring, warning that it comes with consequences.
And as for Government entering into a formal arrangement with the International Monetary Fund (IMF), Inniss said: “As far as I am concerned the Government of Barbados has been engaging with the IMF for quite a while.
“They send their teams every couple of months to do the reviews, advise Government, some of the advice is taken on board,” he said.