Governor Cleviston Haynes delivers the Central Bank of Barbados’ review of Barbados’ economic performance in 2019 and takes questions from the media and the live online audience.
Central Bank of Barbados’ Review of the Barbados Economy in 2019.pdf (4.16 MB)
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Thanks to the blogmaster for his useful tip yesterday,
There was a time I was writing simple code and posting and then I got tired of it.
It is funny that information is soften hared when there is conflict.
Not his fault and not my own.
Just the nature of this beast.
There is no conflict. The blogmaster reads a comment and responds to make the best point. Itis never personal, we are mostly anonymous people here so what is the point.
Here is another view. Barbados Today used a stock photo. You understand why publishers resort to stock photos?
Full stop.
@ David.
Mainly in the 2020 income year, but also those paying in 2020 for 2019 would benefit too. As to how successful we were with getting companies to relocate I haven’t heard. That to me is where the real benefits would be. That would mean what we lose at the lower rate we would gain in a larger corporate base
How much money did Barbados economy lost by these huge Corporate tax cuts
A question which need to be asked of govt
Here is an economy swimming against a massive tide of huge debt
However govt could not present a better secure plan of action having a safety first awareness whereby the financial aspect of barbados would not have been severly affected negatively from these huge tax cuts
A good financial planner would have known that a country living on the edge of massive debt would have pursue a financial plan that would have been less drastic in giving such huge tax cuts to Corporations
@John A
Thanks, wanted to amplify the point for those who are or prefer to be ignorant.
@ David.
Good luck!
@TLSN
I too felt it was a stock photo,. But given the number of photos taken over the years and the presence of the internet all I could think was…
Of all the gin joints in all the towns in all the world, she walks into mine. Play it, Sam
In the 1950’s it might have passed without comment, but today it should be commented on
@ David.
You can’t look at the figures directly though and not include other income. In other words let’s say cooperation tax fell, but personal income tax increased because companies expanded and hired more people. Or suppose a company relocated here paid a lower corporation tax but hired say 12 people. The 12 people bought cars and rented houses etc. You can not look at the corporation tax in a vacuum and say we collected A before and now we collected B. You also have to factor in the additional income generated in other areas from the lower tax base.
one last comment..
One man found a way to do it,,
https://barbadostoday.bb/2018/06/30/collin-carter-donates-library-bearing-his-name-to-st-giles-primary-school/
@John A
All analyzes must be holistic to support a worthwhile conclusion. This is lacking these days in an environment where the central bank, UWI, professionals and other players have seen the public’s perception of their independence grossly eroded. We have discussed why many times.
@ David.
Hopefully the next central bank report will try to capture the data and share it with us.
To be fair this report would not really have shown much even if it was captured as the period it covered was not fully affected by the change.
@ Theo
one last comment..
One man found a way to do it,,(Quote)
Colin has done a wonderful job, but what do you mean?
@ Artax February 2, 2020 9:57 AM
It’s called ‘Simply’ Conflict of Interests!
If you want to get at the Truth of the money matter always dig for the substance which lies below the form.
Now what does the Companies or Income Tax has to say regarding the ‘legality’ of such transactions?
How can these transactions be deemed “Arms Length”? A non-negotiable principle with which you are quite familiar given your ‘professional’ background.
Sounds similar to kind of activity a now disgraced Minister of the Crown was once engaged in.
Pity how Karma can be a bitch to bite ‘white collar’ gangsters in their own backside!
Just want you to know that where there is smoke there could also be budding conflagration despite the truism that it takes more than one Bajan-hopping sparrow to make a ground-dove of a Caribbean summer.
Will Barbados do the same ?
St Lucia turns away cruise ship
https://www.nationnews.com/nationnews/news/243718/st-lucia-away-cruise-ship
PLT mentioned below.
@Hal
To donate books. Not all of us can afford to donate a library and some of us would prefer to donate cash so as to allow the library to address what it consider as ‘really in need of a fix”.
I went searching and found a page for Barbados library on the .bb sites. It was woefully inadequate.
I found a facebook page which was somewhat better but usel…..
I would prefer to see a page on .bb which is full of information and possibly includes instructions on how to donate books/money to the National Library.
Hi PLT this could be a project for one of your coders. It might even put a few dollars in his /her pocket or give him/her some name recognition.
Barbados will never be able to generate substantial economic growth from its own resources because of the excessively high taxes and the bureaucratic hydrocephalus of the lazy civil service.
If there is any growth, it will only come from external factors, especially if the illustrious Hindu Guyanese invest their petro-billions in the Caribbean.
Tourism is still the “only notable” effort without it we will still be economically dead. Therefore Sealy should be thanked.
So…………………………
@ Theo
Colin is a very generous man. Sometime ago I donated about 30000 volumes of books to the Israel Lovell Foundation, and have another 20000 or so donate to a suitable charity. My wife has mad it clear she does not want them.
I offered them to Combermere months ago but so far have not had a reply. The only issue is that they will have to pay for the shipping and the books must be used for reference and not given to individuals or lent out.
“Sounds similar to kind of activity a now disgraced Minister of the Crown was once engaged in.”
@ Miller
Remember, my appallingly ignorance does not allow me to have a ‘professional’ background,
RE: It’s called ‘Simply’ Conflict of Interests!,”
If you’re referring to the Black Bess issue, how can you prove “conflict of interest” in a family company where all concerned are fully aware of their business activities and may have entered into contracts to “legitimize” the process.
So, under those circumstances, is there any evidence to suggest Manning or his sons acted in their own interests rather than that of BBQ or did they have competing interests or loyalties because of their duties to more than one person or organization.
RE: “”Sounds similar to kind of activity a now disgraced Minister of the Crown was once engaged in.”
In MY opinion, the two scenarios are completely different and I cannot see the comparison you’re trying to make.
Donville’s case is a typical example of conflict of interest, whereby derive personal benefit from a decision made in his official capacity as a minister of the Crown…… and moving moving funds he received as a result, through a third party to his personal account in the USA.
On the other hand, what law is there to prevent, for example, an individual from employing his brother, son, daughter, friend, wife or outside woman, despite the fact they may be owners of businesses themselves or establishes such businesses while under his employ?
Let’s say, for argument’s sake, Mr. Browne owns “Browne’s Car Rentals. (BCR)” He employs his son, John, as general manager. John subsequently opens a business named “Vehicle Maintenance Services, (VMS)” through which provides vehicle maintenance and imports used Suzuki Swifts for resale.
Are you suggesting there are laws in the Company’s Act making it illegal and preventing Browne from:
(a). employing his son as general manager and John from opening a company to provide services for BCR;
(b). purchasing goods and services from VMS, rather than from Simpson Motors only;
(c). registering a company named “Browne Holdings Inc., through which he leases cars to BCR;
RE: “Now what does the Companies or Income Tax has to say regarding the ‘legality’ of such transactions?”
Using my example above, as long as Browne honours his statutory requirements by:
(1). remitting NIS and PAYE deductions to the NIS and BRA respectively;
(2). declaring on his TAMIS account, the income from BHI; amount of money he paid VMS for providing “goods and services” and total remuneration paid to his employees, including John, for the income year;
(3). filing, where applicable, income or corporation taxes;
……….he doesn’t have anything to worry about.
@ Artax February 2, 2020 12:57 PM
“Using my example above, as long as Browne honours his statutory requirements by:
(1). remitting NIS and PAYE deductions to the NIS and BRA respectively;
(2). declaring on his TAMIS account, the income from BHI; amount of money he paid VMS for providing “goods and services” and total remuneration paid to his employees, including John, for the income year;
(3). filing, where applicable, income or corporation taxes;
……….he doesn’t have anything to worry about.”
+++++++++++++++++++++++++++++++++++++++++++++++++++++++
So what’s the beef with the Black Bess & Co situation if all the above statutory requirements were met?
The only concern therefore is whether the “companies” have engaged in activities which could have crossed that thin line between tax avoidance and tax evasion.
Those guys can then go on “stealing from themselves” until God is tired of laughing.
We are sure you are ‘Bajan’ enough to have heard the ole saying: ‘A thief stealing from a thief does make God Laugh’.
PS: We are glad to see we both can (now) see eye-to-eye on the Donvillegate conflict of interest case.
But where there is ‘conflict’ there must be other warring or colluding parties.
We shall wait to see if the poor Don is left to carry the dirty can of shame and punishment alone.
But who knows? He might have struck a deal to be be the ‘fall guy’ to protect the interests of both family and friends and to avoid the digging up of more ‘dirt’ to reveal a long list of antecedents of conflicts of interest right through his career as a trusted servant of H M.
Sorry my ‘friend Artax, couldn’t help pulling that one over the trail of the zero-sum game of ‘white’ crime.
@ miller
@ Artax
This should all be a thing of the past now that corporation tax is 5%. To open multiple companies to try and dodge such a low tax rate just isn’t worth it anymore.
@Artax
“So what’s the beef with the Black Bess & Co situation if all the above statutory requirements were met?”
++++++++++++
There is a method to the madness of company structures with interlocking directorates and various goods and services to one or more of the others. The entire point is to separate assets and liabilities into different legal structures so that you can at some point put all the assets in your own pocket and the liabilities in someone else’s.
Black Bess Quarry Ltd. has filed for bankruptcy. Bankruptcy is the legal proceeding involving a person or business that is unable to meet outstanding liabilities. So the question is why is Black Bess Quarry Ltd. unable to meet outstanding liabilities? It is almost certainly because company value has been bled off into related corporate structures. Has the construction, demolition, excavation and site clearing services that the company offers suddenly gone into a slump? No. The CEO explained the company’s final decision was based on its failure to turn a profit last year after a number of years of continuously “losing money”. I put it to you that the company was losing money by design as the value was being bled of to related family holdings.
So even if statutory requirements have been met (and it is by no means sure that they have been) somebody is going to end up getting screwed because by the company’s own declaration of bankruptcy, the business is unable to meet outstanding liabilities.
Who are these liabilities owed to? I do not know. It could be clients, employees, the BRA, subcontractors… What I am sure of is that it is not going to be the Manning family getting screwed.
@PLT
One question to be asked is if the various charges by the internal companies for goods and services were competitive with industry wide prices?
The real issue is that we need a new company Act.
@Peter
Is there any requirement fo private companies to report on related party transactions in Barbados?
David February 2, 2020 3:43 PM
No there is no requirement for privately held companies to report on related party transactions in Barbados; nor is there in the UK, USA, or Canada to my knowledge. That sort of regulation kicks in for publicly traded companies.
@PLT
What do you man that there is no requirement for privately held companies to report…..? Plse explain.
What should matter to those of you who care.
“Workers reportedly received no severance payments from the company and in the meantime, are hoping to receive it in a timely manner from the National Insurance Scheme along with their unemployment benefits. They have also been sent home without payment in lieu of notice or vacation payment.”
” The affected worker also expressed some concern about whether the money collected from them for national insurance payments and income tax via government’s Pay as Your Earn (PAYE) system was being paid in ”
Some of us are not as educated as the maguffees on BU so the fate of the worker is of more concern than the perceived shenanigans of a family of Bajans who will likely never be poor.
@Hal Austin
The only reporting obligation that a privately held company has is its tax return. When I file my taxes for ABC Ltd. I report paying for services from XYZ Ltd. and then I file for XYZ Ltd. and report the income. The BRA has no way of checking that the services that ABC Ltd. received from XYZ Ltd. were commensurate with the charges levied. This is a way of bleeding value from ABC to XYZ so that when ABC is sued or declares bankruptcy, XYZ’s assets are beyond the reach of creditors.
@Hants
The “shenanigans of a family of Bajans who will likely never be poor” are the DIRECT CAUSE of the sad “fate of the worker.”
@PLT
I do not know anything about BBQ and do not want to. But if a company is established in the UK and the principals set up a number of companies to service that company, which then goes in to administration, then it would be taken as a serious issue, by the tax authorities and more important the POLICE.
First, have the service companies worked for any other company? Were their charges competitive with the wider industry? Were they providing services that should be normally expected to be provided by paid staff?
It is not just a matter of tip-toeing round the tax laws. Any such behaviour would b treated as prima facie fraud.
@ Peterlawrencethompson February 2, 2020 4:39 PM
Now here is where the breaching of the Law comes into the picture.
Unless those NIS statutory obligations were met, the “directors” of those ‘employer’ companies, in which ever corporate design they present themselves, ought to be held jointly and severally liable.
The question is whether the monies were deducted from the employees pay but funneled away to satisfy non-statutory demands.
@Hal Austin
In every country that I’ve worked in (Barbados, Canada USA) it is routine to use these strategies to segregate revenue opportunity from risk. They are not illegal unless you act in a fraudulent manner. If you invoice for performing no services that is fraud. If you simply charge premium prices that is not fraud, but given time it is perfectly effective at your objective.
I do not know much about Black Bess Quarries Ltd. either, but I would bet that the majority of the heavy equipment used by the company turns out to be leased from other companies so that it is beyond the reach of both the bankruptcy administrator and liens from lawyers acting on behalf of the workers.
I am surprised the Mannings did not ” sanitize ” the companies by taking care of all the workers before BBQ filed for bankruptcy.
We hear how well workers are treated by the other right owned cownstruction business in Barbados.
@PLT
I do not know anything about strategies and segregating revenues in Barbados or the US. What I am saying in simple language is that if someone establishes a principal company and then that person or associates create other feeder companies to provide goods and/or services to that company, if that principal company then goes in to administration/bankruptcy/liquidation it will not just be a matter of legality or tax obligations; other questions must be asked as outlined above. Any of the creditors, including former employees, will be free to report the matter to the police.
With respect , you do not know anything about how those companies were administered. Have you seen the books?
The problem we have and why some can get away with this time and again, is that there is no law prohibiting the same directors having interrelated activities that allow the fronting company to provide the services while owning no assets.
Did not the exact same thing happen over 20 years ago with RM Construction the fathers company?Did not the NIS then get stuck with the full severance cost then as well?
Don’t be surprised if 10 years down the road the same things does not happen again with them.
So do we blame them or do we blame the system which has allowed these loop holes to be exploited as opposed to closing them?
@PLT
if @BushTea was around, this was one of his several favourite topics.
while what you have noted is correct, the other little issue was taxation. Specifically the establishment of a company in say St.Lucia, to benefit from the lower taxes. Even in public firms, this issue of “management fees” is well known, where they transfer money from one jurisdiction to another to pay less tax.
Going forward, given the tax changes which kick in, there will be less benefit to doing this in future. I have to ‘guess’ given thus far I haven’t read of countervailing revenue measures, there has to be some ‘hope'(?) these off-shore practices are brought back on-shore.
@ Miller
RE: “So what’s the beef with the Black Bess & Co situation if all the above statutory requirements were met?”
I never mentioned there was a “beef with the Black Bess & Company situation,” I simply gave examples of their “business model.” I believe you’re the one who wanted to make a correlation between what allegedly transpires there, the Income Tax and Companies Acts and conflict of interest.
RE: “The only concern therefore is whether the “companies” have engaged in activities which could have crossed that thin line between tax avoidance and tax evasion.”
I did not mentioned anything to suggest evasion or avoidance of taxes. However. it’s common knowledge some owners of sole proprietorships, partnerships and corporation are known to avoid paying taxes. And, this is one of the reasons why I believe BRA officers should visit businesses at random to conduct audits.
Employees also have the right to inquire of NIS and BRA if their NI and PAYE deductions are remitted.
For example, operators of public service vehicles (B, BT, H, HL, Z, ZM, ZR) were required to produce a tax clearance certificate upon renewal of their permits. Obviously, to get a certificate, they must file tax returns and this was one way of ensuring they fulfilled that statutory requirement. Recently, former DLP candidate Kenny Best went to Court to challenge the legality of that requirement for mini bus and ZR operators.
Another example is vendors who set up “willy nilly” to sell. They do not contribute to the NIS or file income tax returns. Yet, they would argue for markets to be built or government “should look fuh some-way to put we,” because we is poor black people looking fuh a dollars,” which they seem to believe qualify them and their children to benefit from tax funded education, medical care, subsidised bus fare…….. and upon reaching pensionable age, they argue about receiving pension.
RE: “We shall wait to see if the poor Don is left to carry the dirty can of shame and punishment alone. But who knows? He might have struck a deal to be the ‘fall guy’ to protect the interests of both family and friends and to avoid the digging up of more ‘dirt’ to reveal a long list of antecedents of conflicts of interest right through his career as a trusted servant of H M.”
I read in yesterday’s “Sunday Sun” Donville will be talking about his case as soon as next week. Perhaps then he will reveal information on others that also engaged in activities similar to the ones for which he was charged and convicted.
Sinckler a few Budgets ago promised to implement a measure to see self employed/small businesses forced to pay taxes or. Like many budget measures they never materialized.
Once again the apologists fir the corrupt corporate vultures are displaying a pathetic ignorance.
It’s obvious that the workers have been screwed. A man opens a company competes directly with a company he had previously. That company files bankruptcy while the new company makes substantial profit. And here we are talking about “strategies” and corporate cultures over and away. Speak the truth: Manning screwed the black workers at Black Bess Quarries!
I guess he ain’t black and he ain’t name Inniss so he gets a frigging pass.
Massa day done. Really.
@William
The point you are missing is that there is always tension between capital and labour. This is not unique to Barbados. This is an inherent behaviour to be found in the capitalist system. It is up to the workers to organize and access services to mitigate.
@ David.
This opens up a much bigger concern for me. In the awarding of government contracts does anyone check to see the structure of the company they are giving these contracts to?
In other words what is to stop a fronting company getting a contract and running off with state funds having not completed the job, only to find they don’t even own a wheel barrow that can be leaned on in court? What due diligence is done prior to awarding contracts to ensure we as tax payers are protected against such individuals?
@John A
If RFPs are well structured you should not have an issue.
@ David
Your feeble response was expected. What tension.?The man opened a consultancy doing exactly what the company that they say bankrupt did. Thus is no genuine fight between capital and labour. This is pure corporate skullduggery.
I also hope that you and the other apologists read in today’s nation that the semi privatization of the airport may lead to nearly fifty percent of the workers being retrenched.
Another “fight” of capital and labour, I presume.
These are the very same people that are not spending a penny to assist the government that they were marching up and down with. Every time I raised the question of why the private sector were not investing you opposed me. Now every day we are hearing that the private sector needs to invest in the country. Truth hurts.
Enjoy the crumbs from the table. Eat enough and your belly we hope would eventually full!
@William
The business models these days will force retrenchment. This is 2020 and not the 70s. You need to fast forward your way of thinking. Terms and conditions/tenure continue to change.
@ David
You say that but let me ask you one simple question.
Is a condition of the award of a state contract dependant on those tendering submitting with the tender up to date audited financial statements?
If this is not done how do you know the company winning the tender is sound?
Wait don’t tell me ” dem good man they been round long”
@John A
Any decent RFP should require information to support the financial health of the supplier along with a custom list to satisfy quality assurance concerns. As you probably know any sensible requirements can be written into the RFP.
@ William
@John A
You guys are remarkable. I must give it to you. Reasoning is an acquired skill and some people will never get it.
On the issue of the Central Bank’s failure to relinquish control of CLICO, the CL Financial shareholders quote statements made by Governor Hilaire on November 15, 2018 that “CLICO has returned to solvent status with an asset value which exceeds its liabilities even after allowing for the outstanding preference share liabilities that remain owing to the government.”
https://www.nationnews.com/nationnews/news/243732/trinidad-us-clico
@JohnA
Is a condition of the award of a state contract dependant on those tendering submitting with the tender up to date audited financial statements?
Fair question. Wasn’t there once a requirement you needed a “pass” from the BRA. In other words, the content of the tax return was less relevant than assurance from the BRA they were current. While a solid requirement, an interesting ask given the majority of public bodies and SOE’s haven’t filed similar Annual Reports in several years.
The “reporting and remitting” part of Barbadian society is broken. How long ago was it that Minister Straughn called for the update of annual reports from public entities? How many have you seen and for what periods?
The blogmaster invites you to join the discussion.