ICAB: Budget proposals to grow tourism lack details
The Institute of Chartered Accountants of Barbados (ICAB) has welcomed proposals announced by Minister of Finance Chris Sinckler to generate growth in the vital tourism sector.
However, in its assessment of the 2016 Financial Statement and Budgetary Proposals, ICAB also expressed concern at the “lack of detail in some of the proposals advanced” by the minister.
It said in a statement the measures to stimulate growth, especially in the tourism sector were commendable and the proposed extension of the geographic areas eligible for special development incentives under the Tourism Development Act would stimulate investment and improve the quality of the tourism product.
It also welcomed the technical and financial assistance to small business and manufacturing.
However, ICAB continued to advance the view that apart from specific incentives there was the need for Government to focus on making it easy to do business across all sectors in order to boost competitiveness.
Between 2012 and 2016 Barbados fell from 84 to 119 of 189 countries on the ease of doing business index, according to the World Bank’s Doing Business Report.
This ranking is lower than previous years and sits below the Latin American & Caribbean average of 104.
A major feature of the budget was the imposition of an additional $156.4 million in taxation through the Bank Assets Tax and the National Social Responsibility Levy, the grouping of chartered accountants noted.
“These taxes will eventually be reflected in increased prices for goods and banking services and negatively impact on the cost of living,” ICAB said.
While noting that the proposals for expenditure cuts were less definitive and included a cut of $50 million per year in transfers, ICAB said this represented a clear policy preference by the Freundel Stuart administration for fiscal consolidation by increasing taxation rather than reducing expenditure.
“The earmarking of the two per cent tax on imports for spending on healthcare and sanitation also clearly signalled Government’s intention to move towards direct payment by taxpayers for certain social services,” it said.