More uncertainty on price reductions

There is more uncertainty as to whether Barbadians will see lower prices as a result of the removal of the controversial National Social Responsibility Levy (NSRL).

Government had informed the public that with the removal of the NSRL, prices were expected to fall in a matter of two to three months.

However, the Barbados Chamber of Commerce and Industry said yesterday that during a meeting with its members, the Chamber Members acknowledged that the removal of the NSRL will have differing implications for the various sectors affected by the levy.

The meeting on July 2, 2018, was held at the Chambers’ Secretariat, to discuss the removal of the NSRL and the implications on Members and the general public.

“For instance, the meeting also acknowledged that where goods were exempted from the Value Added Tax (VAT) Act... and were not subject to the application of the Levy, it was not expected that those products would incur any consequential reduction as a result of the removal of the NSRL,” the BCCI said in a release.

Additionally, the BCCI Members were of the view that the removal of the NSRL had to be contextualized in an environment whereby other operational costs such as shipping, fuel, supplier and other input costs may result in price movements that may impact the final cost of the goods after the removal of the Levy.
The private sector body pointed out that specific representation was made on behalf of the manufacturing sector where it was stated that the recently announced fuel tax, garbage collection and sewerage tax as well as expected increases in payroll costs attributable to the 1.5 per cent increase in the NIS rate for Health Service Contribution will temper any potential reduction of prices attributed to the removal of the NSRL.

The Meeting recognised that the general public is expecting to see ‘relief’ as a result of the removal of the NSRL and gave the commitment to remove the Levy wherever it was applied. While determining that robust competition within the market would ensure that prices are kept at fair values, the participants cautioned that the impact of the removal of the tax also had to be assessed by examining the increases in taxation and other costs that will now apply to local businesses.

The Members of the Chamber reiterated their full commitment to work with the Government of Barbados, particularly the Ministry of Finance, Economic Affairs and Investment as well as the Ministry of Small Business, Entrepreneurship & Commerce, to ensure that there is greater transparency in the monitoring of prices and that Barbadians are assured value for money. In that regard, the Members of the Chamber have signalled their willingness to meet with government officials in the near future to discuss the overall impact of the new government measures on prices in Barbados.