BCCI: Let’s hear it
BARBADOS’ PRIVATE?SECTOR has accepted that it would be wrong to ask the country’s poor to bear more of the economic burden.
It is also not pushing for an increase in value added tax (VAT). However, the private sector wants Government to relook some of its social programmes because it has no choice but to close the fiscal gap.
President of the Barbados Chamber of Commerce and Industry, Andy Armstrong, told BARBADOS?BUSINESS AUTHORITY on the weekend that the new Freundel Stuart-led adminstration was between a rock and a hard place.
Despite this, Armstrong said, Government had to do something to stimulate the economy and local businesspeople were very eager to hear Government’s plan in the yet to be delivered 2010 Budgetary Proposals.
“I share the concern that we need to look after the most vulnerable in society and it would be wrong to ask the poor to bear more of the burden but we need to look very carefully at a lot of the programmes that the Government has and the way it spends the money, and the general efficiency within the public sector.
“We are certainly not advocating a VAT increase because that will impact everyone and the burden will tend to fall more heavily on the poor. Let us not forget that Barbados has a very large basket of goods that are zero-rated for VAT, such as fresh vegetables, meats and a lot of basic foods that do not carry VAT.
“So a change in the rate of VAT will not have an effect on those items anyway.
“It is a tough position that the Government is in now because they need to close that fiscal gap,” the chamber boss pointed out.
He said the basic problem facing Government was falling tax revenue as the profitability of companies fell.
“If you increase the rate of [corporate] tax, I am not sure that you are going to collect a whole lot more taxes,” Armstrong argued.
And while lauding the administration’s Medium Term Fiscal Plan (MTFP), Armstrong expressed concern about attempts to close the fiscal gap too quickly since it could prolong the country’s move towards economic recovery.
At the same time, he said, Government could not move too slowly either.
“They need to make sure they do what they need to do to stick to the time line that they have set for themselves. . . . If you wait too long, it will create problems down the road. So the MTFP is a sensible plan and what we need to hear in the Budget is how close they are to achieving the numbers that they set for themselves.”