Call for dialogue before imposing 0.2% tax on assets of credit unions
Let’s follow precedent and engage in dialogue before any taxes are imposed on the assets of the island’s credit unions.
President of the Barbados Co-operative Credit Union League Ltd, Hally Haynes, made this plea today while speaking at a Press conference at the offices of Co-operators General Insurance on Upper Collymore Rock, St Michael.
Expressing concern at Government’s unilateral decision to impose a 0.2 per cent tax on the assets of credit unions, Haynes said: “The credit union sector only learned of this tax imposition when it was announced by the Minister of Finance during the recently concluded Estimates Debate for the fiscal year 2014-2015. The league as the representative body for credit unions is extremely disappointed that there was no consultation with the sector prior to the announcement by the Minister of Finance.
“We reasonably would have expected to have an opportunity for dialogue before a tax such as this is implemented. A movement that represents over 160,000 persons is certainly deserving of an opportunity to enter into dialogue on behalf of its membership which represents well in excess of 50 per cent of the adult population of this country.”
In registering the league’s objection to the tax, Haynes pointed out that credit unions were very different from other types of financial institutions since they were not for profit organisations and have mass-based membership.
Arguing that the tax impost is an aberration, the president said: “Credit unions have generally enjoyed a non-taxable status throughout their existence. In the United States, efforts were made to tax credit unions and the USA legislators did not agree to the imposition of taxes given the uniqueness of credit unions among other things. Furthermore, no other jurisdiction in the Caribbean imposes such a tax on credit unions.”
Haynes told members of the Press that analysis had revealed that 15 credit unions could record losses as a result of the imposition and a sum of $3.6 million will be extracted from the movement at a time when trade unions were assisting some customers in rescheduling their loans.
The outspoken president pointed out that the tax is on assets and loans make up 76 per cent of the assets of credit unions currently offering service to its over 160,000 members.
Meanwhile, in offering solidarity to the local credit union movement, President of the Caribbean Confederation of Credit Unions, Aaron Moses, noted that the 350 credit unions which make up the confederation in 17 Caribbean countries has a membership of 2.1 million members and an asset base of US$4.8 billion. Moses called on policy makers to urgently meet and dialogue with the local tade union movement since it had contributed to the formation of a vibrant middle class and the social stability in the region.