BERT to the Rescue

The government has announced its decision to lead the country into an IMF program. Soon the citizenry will brace for the roll out of phase two, three and the several others that will be required – given the stasis state of recent – to kick start the economy and the social benefits that must be be sustained and improved.

The blogmaster shares the following video to support the job of continuing to create awareness about our current state, the plan and …

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  • Anarchy reigns in Barbados. Why is a so-called economic consultant making government policy? The announcement below should have been made by the minster for economic affairs, or a junior minister, but certainly by a politician, not a hired hand. What is happening to our democracy?

    Small business owners are being told that they will not have to pay Value Added Tax (VAT) twice if they have already paid the tax while making an online transaction, one of the Government’s top consultants on the economy has told the small business association.
    Starting on May 1, Barbadians buying goods and services online will be required to pay VAT on any taxable items at the point of purchase, as opposed to when the items land here.
    Special Envoy to the Prime Minister on Investment and Finance, Professor Avinash Persaud, has told the SBA’s monthly information session: “The system is set up so we avoid double taxation. When you purchase a good or service that is subjected to VAT, you will pay the VAT online, you will get an electronic receipt on your phone, tablet or other devices, or you can print it if you so choose. When you go to the port to collect the item, once you show the Customs Officer your VAT receipt you are free to go. However, if there is a situation in which you have paid VAT on the product but not the shipping costs, the officer will work out the difference between what you owe and what you have already paid, and that is all you will have to pay.”
    Government has spoken to the 12 main online payment processing services including PayPal, Mastercard, Visa and American Express to advise them of the products that attracted VAT so they could apply at checkout, the economist said.
    He stressed that the VAT only applied to such products if they were going to be consumed in Barbados.
    “There are two things they check on, and that is whether the product or service is VATable in Barbados and if it is being consumed here. Now, the company would not always know that, and if it does not, then it would not charge the VAT.
    “If you book a hotel room in Barbados or rent a car you plan to drive while on the island online, you will pay the VAT for that as those services will be used in Barbados.”
    But Professor Persaud also noted that if consumers paid local suppliers directly with their credit cards they would not be subjected to the online VAT charge and that it was not an attempt by Government to trace people’s credit card purchases.
    Government was losing some $50 million in revenues as a result of not recording, or under-recording, such purchases, he declared.
    “This is not a new tax but a new way of collecting an existing tax, and we should gain $50 million from it. Now to put this into perspective, if we collect the $50 million we may be able to lower the VAT rate by at least one percentage point; $50 million is almost half what we spend on UWI, and a significant chunk of what we spend on the Queen Elizabeth Hospital, so if anyone has a better idea as to how we can raise this money, let us know and we will think about it,” he said.
    Professor Persaud also sang the virtues of the Barbados Economic Recovery and Transformation Programme (BERT), which he described as “the most shared adjustment programme in world history”.
    “With this programme, we have shared the adjustments between creditors and borrowers very evenly, we have shared the adjustment between government workers and taxpayers evenly, and we have also shared it uniquely between residents and non-residents through the increased VAT and the room rate levy.
    “Barbados now has the lowest tax rate in the world for non-zero compliant countries in the OECD, and we have reduced our labour, income and corporate taxes, but increased them on land and transactions. The reasoning behind this is that when you tax land, you encourage people to use it, and this will support investment.” (DH)(Quote)

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  • Government is preparing a National Industrial Policy which will seek to revive the manufacturing sector, Minister of International Business and Industry, Ronald Toppin has said.
    Following a tour of the booths at BMEX 2019 yesterday, Toppin told reporters the first draft of the policy is expected to be ready by September, and finalised before the end of the current financial year in March 2020.
    Toppin praised the exhibits at the June 7-10 event, but he lamented the decline of the local manufacturing sector.
    “We’ve seen a significant decline in the fortunes of the sector, certainly over the last decade or so, when you look at the number of people employed in the manufacturing sector; the number of companies in the sector, the level of investment in the sector; or the contribution of the sector to our Gross Domestic Product. All of them have declined significantly over the last ten years or so,” he said.
    He added that talks are ongoing between government and local manufacturers, and there are plans for a national consultation in the coming months to hear their concerns.
    He also acknowledged there are several challenges facing manufacturers, particularly the area of access to financing.
    “Our objective in all this is to ensure we have a very highly competitive, financially strong manufacturing sector, we can move to boost our domestic exports significantly, create large numbers of employees again in the sector, earn foreign exchange, increase import substitution, put the country’s development on a more sustainable footing through our manufacturing sector’s improved performance, and of course deal with the issue of the alleviation of poverty,” Toppin said.

    He noted that government is also aiming at two new industries particularly in ICT and pharmaceuticals.
    “Pharmaceuticals also offer a wonderful opportunity for us to attract a big player. In fact, we’ve already been approached by a big pharmaceutical entity, and we expect to begin negotiations with that entity in the very, very near future,” he said.
    The minister also pointed to the significant decline in the apparel industry, which once employed an estimated 4,000 people at its peak, but as of May last year there were only 300 employees on record in that sector.
    “And that is an industry, or a subsector that employs 85 per cent women. So you can understand how single mothers and so on would have been hit with the decline of that sector. So we want to see that back again up full strength,” he told reporters.
    Toppin noted however, that despite the challenges there are ongoing projects aimed at boosting exports.
    “And the one that I find very appealing is the rolling out of the Accelerate 2020 project where the BIDC [Barbados Industrial Development Corporation] is working with 20 companies to round them up to a certain level of production where they can actually generate more than $3 million in export earnings per year.
    “There are currently 21 entities on the books of BIDC that already earn more than $3 million a year in [exports]. And there are some 20 that earn over $500,000 a year in export earnings. So the objective is to boost the ones earning over $3 million to even more, and bring some that are earning only $500,000 up to the $3 million level,” he said. (Quote)

    Let us see what this industrial strategy is going to be. Is this part of BERT?

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