The National Social Responsibility Levy and the foreign exchange fee have small and medium-sized businesses unsure whether to charge increased prices to customers or reduce staff, Small Business Association President Dean Straker has said.
Speaking last night at the annual awards ceremony for outstanding members of the Association, Straker said “our secretariat has been receiving updates from our members on the increased costs to their operations because of the NSRL and the FX tax, and the challenge of either passing on this cost to the consumer or reducing staff to keep doors open”.
The SBA Awards, held at Radisson Aquatica Resort, marked the end of Small Business Week in which Association members not only celebrated their achievements but also charted the way forward while noting challenges.
According to Straker, the main challenge has been Government’s imposition of the NSRL, which was hiked 400 per cent in July this year taking the total tax to ten per cent on imports. Added to this is a two per cent charge on the value of all foreign exchange transactions on anyone in Barbados seeking to do business or anything that involves use of foreign currency.
The FX fee was partially introduced in Mid-July with the second and complete application being imposed at the beginning of September.
“The resultant impact on business has been demoralizing with the latest taxes announced this year – the NSRL and tax on foreign exchange transactions – destablizing several firms, small and medium alike”, said Straker who spoke of “a greater tax grab by Government to support its operations” in the face of an economy struggling with little or no growth for many years.
“Our economic performance over the past decade confirms that our model of business development needs to be revisited,” he said.
“You cannot tax your way out of a fiscal problem,” he said to an audience that included Minister of Industry, International Business, Commerce, and Small Business Development, Donville Inniss.
Asserting that the time is now for new thinking and approaches to the way business is done in Barbados, Straker said, “let us not miss the opportunity from the current economic malaise to re-imagine what is needed and . . . our capabilities”.