BCCI, BHTA speak out on tax
THE BARBADOS CHAMBER of Commerce & Industry (BCCI) and the Barbados Hotel and Tourism Association (BHTA) are among the latest entities to speak out against the new Municipal Solid Waste Tax.
The BCCI noted today that while it recognises that the Government must find ways to increase revenue and reduce costs as part of its attempt to close the deficit, one of the major concerns relates to the basis used for calculating the tax. Another main issue is with its impact on the cash flow of businesses.
BCCI president Tracey Shuffler said although the BCCI cannot determine the exact indicator of the level of waste produced by each person or group of persons, it believes the value of improved land has no bearing on this at all.
She said the tax is therefore not equitable and will disproportionately impact pensioners, persons who have inherited lands but have modest incomes, the unemployed and businesses with large landholdings with little economic yield from them.
The BCCI revealed that some of its members were already struggling to make reasonable returns on their assets and investments in Barbados and the number of commercial lands and properties for sale is a testament to the need to shed underperforming assets.
The Chamber also reported that a number of companies are struggling to collect monies owed for goods and services sold to Government and this is having a “punishing effect” on their ability to continue trading.
It therefore proposed that those businesses owed monies by the Government be allowed to offset this new tax fully against these long outstanding receivables where applicable.
“It is further suggested that for all commercial property owners, the first payment of the MSWT be penalty and interest free until the second payment is due on December 31, 2014,” the body said in a release.
Meanwhile, BHTA president Sunil Chatrani said the tax was another financial burden on an already struggling sector.
“This tax is levied on the site value of lands with an improved value and the highest value lands on this island are usually the beachfront parcels where, fortunately or unfortunately, 99 per cent of our hotels are located.
“For this reason, this sector will bear the brunt of the tax at a time when it is currently seeking financial relief in the form of promised duty-free concessions that are yet to be received. Nevertheless, we have continued performing on an uneven playing field for several months now with the understanding that these concessions are forthcoming,” he said.
Chatrani noted that due to the nature of the hospitality business, most of the real estate is owned by the operators who, in order to remain competitive, make substantial reinvestment in their properties on an ongoing basis.
“This requirement makes ours one of the most heavily capitalized of all the sectors. Yet, while we continue to improve our product and increase the land values, we are being penalized for our improvements,” he said. (PR/NB)