‘New tax will not change spending habits’
Barbadians will not change their spending habits after the new National Social Responsibility Levy takes effect tomorrow, some Bridgetown businesses are predicting.
Despite an anticipated rise in prices – although it was not clear when consumers would begin to feel the effect – the business executives said they expected people to purchase the things they needed regardless of the already unpopular tax.
In any event, the retail traders said, they planned to find creative ways of ensuring that prices remained within the reach of consumers.
The widely unwelcomed levy, which will be applied at two per cent on the customs value of all imported items, with the exception of goods for the manufacturing, agriculture and tourism sectors, is intended to finance public health care and sanitation services.
All locally manufactured items for local consumption will also attract the new tax, which is expected to rake in $142.1 million annually for Government’s coffers.
President of the Barbados Chamber of Commerce and Industry Eddie Abed has already given the assurance that the local business community was responsible and would pay great attention to the details, but would not engage in any price gouging when the new tax becomes effective.
He had also explained that while consumers should expect price increases of between four and six per cent, the hikes would not become effective tomorrow, given the fact that businesses had a lot of stock which had not attracted the new levy.
Today, a few operators of Bridgetown businesses stayed clear of saying if they believed the tax was a fair one, but they shared with Barbados TODAY how they intended to handle the levy and what consumers should expect.
Retail Sales Manager at furniture and appliance store Standard on Broad Street Alexia Halliday said with every new “challenge”, the business found a way to overcome while ensuring that consumers were not heavily impacted.
“We do not think that it [the new levy] will generally impact our store in terms of the sales. We will find a way to be able to be able to deal with that and overcome it and to market our products,” Halliday said.
“We have a very good product line. We do very good within the industry and we have a very good reputation within the industry for good quality appliances and furniture and customer service. So at the end of the day customers will still need to be furnishing their homes, they will still need to be replacing their appliances. So we think that at the end of the day we will do pretty well,” she added.
Manager of the apparel store Raw, George Mayers said while storeowners would have to pass on the increase to consumers, he did not expect people in that industry to raise prices immediately.
“I believe that the new tax will obviously be passed on to the consumers and make prices a little more expensive, but I believe that businesses should not use it as an opportunity to raise prices right away. Most of the items that we would have in stock would have already been in the island without the new tax. So the prices will remain the same,” Mayers emphasized.
“The prices should only show an increase with new stocks coming into the island, but I believe that the two per cent tax will have some impact on the costs of goods going forward.”
Yancy King, owner of Overflow Boutique in Norman Centre, told Barbados TODAY she was not worried about the new tax, stating that while there might be some price change as a result, she maintained a positive outlook.
“I don’t know if it is going to affect me [a lot] but I have to wait and see what is going on. But we will cross that bridge then,” King said.