Controversial Tax In Focus As Barbados’ Social Partners Discuss Economic Situation

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Some of the trade union representatives at today’s meeting.

 

BRIDGETOWN, Barbados, Friday August 11, 2017 – Robust dialogue involving all the partners in Barbados’ Social Partnership is taking place today, as Prime Minister Freundel Stuart, Government ministers, technocrats, the island’s trade unions and top executives from the private sector try to reach consensus on the way forward for the ailing economy.

The highly anticipated meeting that is being televised, follows weeks of contention between the Government, and labour and the private sector over this year’s budgetary measures which included significant tax hikes.

As the meeting got underway, representatives from both labour and the private sector expressed their dissatisfaction with Government’s failure to respond with urgency to the serious issues facing the economy.

Barbados Workers’ Union (BWU) General Secretary Toni Moore told the gathering that “the challenges confronting the economy was made worse by a combination of inadequate foresight, failed communication and the lack of definite action that gave account to the involvement of the social partners to avert the quandary which we regarded was confronting our country”.

She expressed reservations about today’s talks, which she said were being held in a “peculiar format”, but said the union accepted in hope that it would help to resolve some the island’s pressing problems.

“At least the arrangement could be the start of an exercise, even though belated, to open transparent debate not only within the Social Partnership but all members of society on the issues that confront and affect us all,” the BWU boss said.

As expected, the near 400 per cent increase in the National Social Responsibility Levy (NSRL) was the major talking point.

General Secretary of the National Union of Public Workers (NUPW) Roslyn Smith argued that the levy was ill-timed, making a case for a full roll back or a reduction.

“The levy was a move too swift, from two per cent to ten per cent,” she said. “We have been asking either for a repeal of the levy or to have it reduced to five per cent.”

Smith also challenged the Government to come clean on how it was spending the revenue earned from the NSRL.

She said Government had initially announced that earnings from the tax would amount to $40 million, but it actually earned $60 million. She also raised concern that the NSRL revenue which was to be allocated to the Queen Elizabeth Hospital and the Sanitation Service Authority was not realized.

“We want to find out exactly how that money was spent,” the Smith insisted.

NUPW president Akanni McDowall set out a firm case for workers to be given a coping subsidy to cushion the impact of the NSRL, widely expected to cause a significant rise in the cost of living.

Moore, however, urged caution on the coping subsidy as she instead pressed for a reduction in the NSRL.

“This meeting may actually be able to realize the benefit in reducing the NSRL; that is our hope…and if we can address that, we may not have to look at a coping mechanism.”

President of the Small Business Association Dean Straker pleaded with the Prime Minister to seriously look at the NSRL, which he warned would devastate local manufacturers.

“In the case of the garment factory, you will be paying NSRL on threads, buttons, fabrics – that is what you would be paying the NSRL on, and I think people can live with that. However, when you have to pay NSRL on all their wages, on all the rent, electricity, rent, NIS [National Insurance Scheme contributions],  it just cannot work; it is unfair,” he said.

Straker, who operates a textile and apparel company, reported that sales since July 1 were down 20 per cent.

“It is only obvious that if sales are down you can’t continue to pay your expenses, so I am really begging and pleading to please consider…this NSRL that is implemented on the manufacturers in this country.”

President of the Barbados Chamber of Commerce and Industry Eddy Abed said his members was not asking for the NSRL to removed entirely, but said Government had to provide answers about the tax as he raised concern that it was not enough to solve the country’s economic woes.

“We would like to get to understand some of the reasoning behind why it came about…what amount of revenue it will be able to incur now, since certain omissions have been made from the basket of goods….So, in our minds, as much pain as this is going to cause,  it still is going to fall short of the mark; hence they may well be additional revenue measures that have to brought in. We don’t know because there is uncertainty. We operate in an environment where there is not enough information so that knowledgeable and reasonable interjection that can be made,” he lamented.

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