The start of a new year is usually accompanied by optimism, with businesses looking to capitalize on new opportunities either to consolidate or grow their market share.
Here are some of the hindrances that currently exist and can dampen business confidence at a time when more investment is needed. A few developments, if aggressively pursued, could make a big difference in lower business costs.
Legislative framework – At present, manufacturers have made significant capital investment in their plants but a number of pieces of (regulatory) legislation prevent the full realization of benefits from their investment.
The unintended consequence is therefore increased operational costs.
In other instances, there is a lack of relevant legislation which by its absence prohibits businesses from exploring and/or participating in credible opportunities, thus contributing to increased costs.
Taxation – Business and other service providers are faced with high professional and other fees; reclassification of high-demand goods/products into higher tariff categories and the imposition of a higher VAT rate and excise taxes only have the effect of increasing costs.
Logistics – Lack of flexibility in working/opening times at the Bridgetown Port continues to challenge businesses with respect to container demurrage. This, coupled with longer transit times in and around Bridgetown and other logistical issues, also contributes to those costs.
Energy policy – With protracted volatility in international energy prices, the lack of a business- and consumer-friendly energy policy has significantly affected the cost of doing business, including higher electricity bills for operating existing plants and higher fuel cost for transportation services.
Social partnership – The private sector participating in the social partnership framework has entered into an agreement with unions and the public sector to maintain employment in order to avoid social dislocation.
In the current environment – high inflation, higher taxation and reduced aggregate domestic consumer demand – the objective observer could only conclude that in the absence of significant technological advancement, private sector businesses have temporarily rid themselves of the one “truly flexible” factor of production that could lower business costs.
Civil Service – By its nature and design it is not suited to the 21st century. One need only point to its lack of coherence and coordination, where in some cases the same information has to be submitted (in duplicate/ triplicate) only to wait an inordinately long time for a response.
Government has brought some positive developments on stream, which will enhance business facilitation and over time should help to reduce operational cost.
The establishment of a central revenue authority is a good step but needs to be pushed further so that taxpayers benefit directly from its existence.
Online tax filing is a positive development in its own right – but to really lower business costs, online payment must accompany it.
This policy needs extending to all Government agencies which would improve the collection and dissemination of information and decisions.
My simple answer to the question is no, not fast enough.
