IN THE AFTERMATH of the recent budgetary proposals of the Minister of Finance, some lingering key issues related to economic growth and the implementing of proposals for the administration and collection of the National Social Responsibility Levy, merit some comment.
It is obvious enough that the levy was designed to increase Government’s revenue and as a consequence, it will increase the cost of living, because it will have the result of raising the amount of the value added tax (VAT) on eligible imports since, as the Minister of Finance said in the Financial Statement, the levy will apply before the VAT is imposed. That was clear enough.
But even here questions have arisen, for the Barbados Revenue Authority, in speaking to the implementation, has issued a policy note which seems to move away from some aspects of the ministerial statement. It now seems that on local domestic output the VAT is to be calculated exclusive of the levy. Implementation and practice may be different from policy, but this partial variance while it may be a welcome mitigation of some of the impact of the levy on prices is curious, since it may reduce the desired revenue intake.
The timing of this levy may have been a critical feature geared at enhancing the probability of the levy reaching its desired goal of collecting the estimated yield, as most of the goods to be imported for the Christmas season would have been ordered before the tax was announced and would be caught by the levy on arrival at the ports.
In order to achieve its objective, the policy must be clear and the mechanism for fulfilling the objectives must not only be clear but also certain. Uncertainty and lack of clarity can wreck the most nationally desirable policy.
There can be no doubting that the Government, strapped for revenue as it appears to be, is doing what it thinks necessary to ensure the good governance of the country, but it has to engender confidence in its endeavours if it is to persuade business people to expand their businesses as well as to convince potential business people to start businesses.
We urge Barbadians concerned about their country to give support to these measures even if they may contend that we should not have been brought to this stage. We feel that they should also warmly welcome the establishment of the $75 million funding scheme created by the Inter-American Development Bank designed to support small business enterprises, and the First Citizens Bank scores marks for getting out of the blocks quickly in declaring their support in assisting small businesses in packaging their proposals for funding.
The small business sector is of very keen importance to the growth of our economy, but sometimes entrepreneurial talent and start-up business ventures can wither on the vine for lack of funding.
We applaud the setting up of this facility and the efforts of the Small Business Association (SBA) in constantly lobbying for small businesses and keeping the needs of the sector of the economy before the public eye. SBA president Ms Lynette Holder should be supported in her call for credit unions to be allowed to access the funds on behalf of small businesses.
We are all aware of the uniquely indigenous role that these institutions continue to play in national development, and unless there is some good reason for excluding them, their inclusion could help in getting funds to sources needing them.
