Some of Barbados’ smallest businesses are owed $21 million by government and want it to pay up.
Small Business Association CEO Lynette Holder, saying like the Barbados Private Sector Association, she was “gravely concerned” about the state’s indebtedness to businesses, most of them already struggling to make ends meet.
Last month the BPSA said a survey of corporate Barbados had found that government owed businesses about $49.6 million in Value Added Tax refunds, corporation tax refunds, diesel rebates or sums owed for the supply of works, goods and services.
Holder, in a comment on the matter published in the SBA’s February newsletter released today, was especially concerned that 72 per cent of the companies surveyed were small and medium sized enterprises.
“Taken in context, 44 per cent of the firms interviewed were micro businesses – one to nine employees – being owed some $21 million alone. This is an unacceptable situation in a struggling sector,” she said.
Failed to settle debts
“I understand the numerous challenges that Government faces in these very trying times, but the failure to settle its debt to SMEs and other businesses further exacerbates the economic problem.
“Small businesses already faced with the challenges of shrinking markets, fierce competition, and high production costs cannot also be asked to provide goods and services promptly with no immediate recourse for compensation,” she added.
The official warned that Government’s failure to pay its debts “will only lead to the other problem of SMEs not being able to meet their statutory obligations to government”.
“It is a vicious cycle,” she said, “SMEs simply do not have the flexibility to maintain huge receivables as some large organisations and therefore I am hopeful that with the BPSA bringing the matter to light this imbalance will be rectified in the new fiscal year.”
In response to the BPSA survey, Minister of Finance Chris Sinckler had pointed out that while businesses were calling for government to pay them what was owed, many companies also owed the state hundreds of millions of dollars, meaning they were contributing to their own problems. (SC)