Little interest in tax credit
Local businesses have been showing little or no interest in taking up the Productivity Innovation Tax Credit announced in Government’s 2010 budgetary proposals.
Speaking at the official launch of the Productivity Tax Credit Fund recently, Chief Programme Manager of the Productivity Council, Anthony Sobers, said since the initiative was announced, only three companies had expressed an interest, but not applied.
Sobers, who was addressing stakeholders and reporters at the council’s Baobab Towers office in Warrens, expressed dismay that nobody even mentioned the tax credit when he attended meetings of the Barbados Chamber of Commerce and Industry.
He explained that the PITC was a tax credit introduced by the Ministry of Finance and the Productivity Council in collaboration with the Inland Revenue Department as an incentive to spur productivity in the Barbadian business sector. He said it was designed encouraged companies to invest in systems, processes and structures, which would improve their output and competitiveness through bolstered innovation and creativity.
It’s aims, Sobers continued, was to assist organisations with developing innovative management capabilities, which would form the basis for driving their productivity growth strategy. He pointed out that the tax credit supported the implementation of business excellence initiatives, which would allow those entities to develop and strengthen their systems and processes in order to achieve higher levels of performance and increased competitiveness.
In order to qualify for the credit, a person conducting a business in 2011 and subsequent income years, who had incurred expenditure in that year related to innovation, would be entitled to a 25 per cent relief of the amount spent during that period.
Sobers told those attending the launch that a company must be in business for at least three years prior to application, in order to benefit from the credit. He also said the innovation must show results.
“The innovation should be regarded as successfully introduced in the market, if the business realises commercial value as evidenced by any of the following: Increased sales for the period, calculated from beginning of year sales to end of year sales; increased productivity growth over previous period and organisational efficiency gains over the previous period,” Sobers explained.
Senior Inspector with the Inland Revenue, Neville Clarke, said his department would also give businesses a 10 per cent credit on their income tax for maintaining increased employment for three years.
“This is not only for big companies, but for small businesses as well,” he declared. (EJ)††