The Budget presentation is likely to be one of the most anticipated in recent years with Minister of Finance Chris Sinckler expected to state exactly how Government intends to cut its expenditure by $400 million.
Already, the Democratic Labour Party administration has ruled out immediate public sector job cuts and an increase in value added tax (VAT).
However, it has announced concessions for the tourism industry and businesses and individuals involved in the production of renewable energy.
In the July 27 SATURDAY SUN, chief executive officer of the Small Business Association (SBA), Lynette Holder, agreed with the decision not to increase VAT but also suggested a reduction in existing taxes.
She said she did not think the economy could manage any increased or additional taxes, given the current economic climate.
Asked what she was expecting for the small and medium-sized enterprise sector, Holder did not go into detail but said there were a number of outstanding issues that were still relevant, including the establishment of an e-commerce platform to allow local businesses to better trade internationally.
The SBA executive said she wanted to see “provisions in the Budget that would allow us to expand the training and development [and] the technical assistance to small businesses so that they can improve their capacity”.
“There is a need now to build economies of scale and reduce overheads as individual firms and one way of doing so is through the cluster model,” she added.
“I would like to see Government work with us to put the legislative and policy framework in place to facilitate greater clusters of firms who, through building their capacity, can export.”
The July 30 DAILY NATION reported that tax breaks for businesses and individuals who produce and use alternative energy were among a wide range of concessions coming under long-awaited green legislation.
The move is intended to encourage the use of alternative energy and investment in the sector, and cut the country’s $800 million fuel bill by 20 per cent over the next 15 years.
The incentives include:
• Ten-year corporation tax holidays for developers, manufacturers and installers of renewable energy system and energy efficient products as well as entities specifically developed for lending loans to renewable energy companies,
• A 10-year corporate tax exemption for all financial intermediaries, such as commercial banks, which specifically develop products to finance alternative energy and energy conservation systems, and
• A waiver of duties and VAT on the inputs for the development of alternative systems and energy saving devices.
Minister of Tourism Richard Sealy has also unveiled a ten-point plan that is expected to lead the way in drawing back visitors from its main market, in addition to allowing tourism players to save money through a renewable energy initiative.
According to the July 19 WEEKEND NATION, the initial cost of the plan will be in the region of $20 million.
In addition to trying to attract more visitors from Britain, tourism officials will also be placing more emphasis on assisting the villa market as well as pushing sports tourism in a way never before attempted.
The minister said that by this winter season, all travellers from Britain who booked at least a fortnight’s stay would receive a special credit voucher in the monetary equivalent of the controversial airport passenger duty (APD), which has been blamed mostly for the fall-off in arrivals from Britain, still this country’s largest source market.
Sealy also introduced a special renewable energy drive which would allow hoteliers to earn five per cent rebates on their electricity and water costs for at least 12 months starting in October.
Another important segment of the plan is Government’s decision to grant the hotel sector a 50 per cent land tax rebate for investment in renewable energy initiatives, once a credible programme was implemented.
In the July 20 SATURDAY SUN, acting president of the Barbados Chamber of Commerce and Industry Tracy Shuffler said while she was generally pleased with the ten-point plan for the revitalization of tourism, the issue of airport landing charges and destination fees had to be addressed.
“I think that the rebate intended for the airport passenger duty (APD) tax in particular is a good first step at making Barbados a more affordable destination but one of the things that we would certainly like to see is to encourage Government to review and reduce landing charges and destination fees generally because they are becoming burdensome to the overall costs of air fares into Barbados.
“When you look at regional travel you can see the effects of it in terms of the cost of air fare, and Barbados is no different. It’s a regional challenge and we need to start looking at it in Barbados as well,” she said.
Shuffler also felt that while some of the ideas were solid, implementation was vital.
“The plans outlined by Ministers Sealy and Christopher Sinckler will need to be further refined so that the intention of each point of the plan aligns with its practicality and ease of roll-out. For example, the efforts at driving energy efficiency and green solutions through the 50 per cent land tax rebate, which has now been extended to the hospitality sector, are applauded and supported by the BCCI.
“However, past experience of some of our members indicates that the . . . criteria for qualification of the existing land tax rebate and inspections required to effect the same remain undefined,” she added.
In the July 27 SATURDAY SUN, Prime Minister Freundel Stuart promised Barbadians that Government would not adopt any short, sharp response to the challenges being faced by the Barbados economy.
“I am not reckless,”?he said. “We will make the decisions we have to make, but within the context of proper consultation, taking into account the vulnerabilities of our households, the fragility of our businesses and of course the challenges faced by the Government, in terms of the need to provide certain basic amenities in the areas of health, education, sanitation, water, law and order, and so on, for the people of this country.”
