MORE than 300 items, some of them including food, will be exempt from the controversial National Social Responsibility Levy (NSRL), one of the contentious issues in the recent Budget.
In stating this yesterday, the Minister of Finance and Economic Affairs, Christopher Sinckler, said this proposal will go to Cabinet and he does not foresee any problem in getting approval for it.
He was speaking to the media following the second consecutive day of meetings with private sector leaders on measures contained in the May 30 Budget. Apart from the NSRL – which will be increased from two per cent to 10 per cent come July 1 – the other matter of concern to businesses is the two per cent commission on the sale of foreign exchange.
He told the news conference at Government Headquarters, that there are more than 300 items which will be exempt from the basket of VAT items, and not just food stuff. According to him, staff will be preparing the requisite Cabinet paper to give effect to them.
“These items will not attract the NSR in the supermarkets, in regular shops, and ordinary Barbadians will not be subject to the NSR as regards those items,” he announced.
However, Sinckler explained that the measures announced in the Budget had to take into consideration the job at hand for Government in stabilising the economy. He said Government continues to experience a shortfall in revenue, pointing out that for instance, the country is losing more than $200 million a year in revenue from the international business sector.
“If you quantify that in multiples, that’s over $9 billion in an economy like Barbados, and you do not replace that type of money in an economy that easily,” Sinckler said.
The Minister noted it was revenue coming not only in the form of corporate taxes, but in foreign exchange.
Sinckler revealed that he is open to suggestions if someone can give a feasible alternative on how Government can get financing for the economy. However, as it stands now, the budgetary measures will remain.
The Minister explained that while the rates relating to the budget will stay, he was able to clear the air with the private sector members uncertain of some of the proposals.
One related to the NSRL.“We were very clear in pointing out to some of the groups who came what the NSR legislation says – that agriculture, manufacturing and tourism should be exempted as regards their inputs, and we were able to clarify that,” Sinckler told the media.
He also said that the NSRL is on the input cost rather than on the selling price. That is going to be continued, he assured.
The Minister added that they were also able to clear up with the tourism people that none of the ancillary services in that sector would be left out when it comes to concessions, since the Act states that if you received waivers of duties you are not subject to the levy. The issue of production cost was also clarified for manufacturers. (JB)