ICAB responds to Central Bank report
It has come as no surprise to the Institute of Chartered Accountants of Barbados (ICAB) that the Central Bank of Barbados’ report has shown no real economic growth in the local economy during the first six months of 2014.
This observation is contained in a press release issued by ICAB earlier today.
The umbrella group said: “The performance is in line with the major objectives of the fiscal adjustment measures announced by the Government in 2013, aimed at reducing demand in the economy to match the reduced inflows of foreign exchange and to ease the pressure on foreign reserves.
“The continued slowdown in local business activity and the pressure being faced by local businesses is reflected in a reduction in VAT receipts and a decline in corporation tax revenue. Indeed it is noteworthy that there was an overall decline in government revenue for the first quarter of the new fiscal year (April- June 2014) not withstanding the imposition of additional taxes.”
The chartered accountants suggested that the usefulness of the Central Bank’s six month report could have been enhanced with the use of up-to-date unemployment figures and deemed it unfortunate that there will be no press conference related to the report on the economy.
The grouping also expressed concern over the imposition of the Municipal Solid Waste Tax, saying it would be an additional burden to taxpayers. It also warned that the levy would further reduce disposable household income and increase the cost of doing business.
The umbrella group stressed that this additional cost would also impact negatively on the island’s competitiveness in the foreign exchange earning sectors, especially tourism where land values are high.
The chartered accountants noted that Government’s interest payments continued to rise as a result of borrowing to finance the deficit.
Expressing concern over Government’s arrears to the private sector, the press release said: “These arrears include payments for goods and services, as well as VAT refunds and are negatively impacting on the cash flow of both small and large businesses.
“Against this background, the Central Bank’s revelation that there is some $97 million in payments outstanding to major state-owned enterprises related to expenses incurred in the last fiscal year is worrisome. We urge urgent settlement of these arrears,” ICAB said.