Cash cow

NSRL rakes in $50 million in first three months, Sinckler says

Despite protests by the labour movement, the private sector and Barbadians on a whole, the much-criticized National Social Responsibility Levy (NSRL) is proving to be a cash cow for the Freundel Stuart administration.

Minister of Finance Chris Sinckler today revealed that the controversial tax had raked in $50 million in the three months since it was raised effective July 1, exceeding even his own expectations when he announced in the May 30 Financial Statement and Budgetary Proposals that the levy would rise from two per cent to ten per cent.

“I believe the figure so far is just short of $50 million, which, if you were to multiply it by the four quarters, would give you just around $200 million [for the year],” Sinckler told Parliament as he introduced the National Social Responsibility Amendment Bill 2017, giving the increase legislative teeth, and listing items that would be exempt from the onerous levy.   

In addition, the minister said, the final intake would be even higher after the Barbados Revenue Authority counts the additional Value Added Tax (VAT) earned on the NSRL.

“That is only on the NSRL component. There is a VAT component to the NSRL,” he said.

The NSRL is calculated on the customs value of imported and locally produced goods.

The levy is applied on the production cost of locally produced goods and VAT is added to the total cost, inclusive of the levy.

“The [Ministry of Finance] staff are now receiving the final filings from the Customs Department on the values on the import component of the VAT to parse out or separate what would have been the increase in that VAT for the period July, August and September to . . .  pull that out, add it to the NSRL proper and then you get the full figure,” Sinckler said.

Local manufacturers have cried that the application of the levy placed their products at a disadvantage, with goods made in Barbados becoming more expensive than imports from countries such as China and Thailand.

Garment manufacturers, for example, reported a drop
in sales in August, which they blamed on the taxing NSRL, the application of which they pleaded with Stuart to reconsider.

The trade union movement and the business community are also united in their opposition to the levy, having organized a joint anti-NSRL protest march in July, which attracted an estimated 20,000 demonstrators.

However, as complaints continue about its impact, Sinckler said the levy was performing “close to what we projected net of these concessions, or the exemptions”.

In fact, the projected haul of $200 million for the financial year will surpass the amount of revenue Sinckler had anticipated when he announced the rise in the May Budget.

Back then he said he expected the levy to rake in $186 million, with another $32 million in VAT.

The rise in the NSRL, was part of a series of taxes, including hikes in duties on petrol and the introduction of a two per cent tax on foreign exchange transactions, aimed at raising $542 million to help Government close a massive fiscal gap.

Meantime, according to a schedule of the bill, which was approved by Parliament today, goods already exempted under the VAT Act, as well as kerosene imported for use as airline fuel; heavy fuel oil (Bunker C); drugs imported or purchased out of a bonded warehouse, or drugs bought here through the Barbados Drug Service; and goods imported or purchased out of a bonded warehouse by an international business company will not attract the NSRL.

15 Responses to Cash cow

  1. Carson C Cadogan October 4, 2017 at 4:53 am

    If the private sector would pay the taxes, duties, rents, etc. that it owes central Govt. then there would be need for a NSRL.

    The Bajan public has to thank the Barbados private sector and a bloated public sector for the NSRL.

    Reply
    • roger headley October 4, 2017 at 9:18 am

      If politicians would stop interfering with the collection then the staff of the collection departments may feel more inclined to be aggressive about collecting

      Reply
  2. harry turnover October 4, 2017 at 6:24 am

    C C C ..ya talking sense for once.That would mean though that Civil Servants and pensioners can look forward to a XMAS increase.

    Reply
    • Carson C Cadogan October 4, 2017 at 7:06 am

      I am always talking sense, it is just that what I say is not what some people want to hear or want to be said.

      Reply
  3. roger headley October 4, 2017 at 9:16 am

    A stranger to the truth

    Reply
  4. Milli Watt October 4, 2017 at 9:43 am

    FRUNS 6 de rest 0……….another six love by the PM. I now understand why dat woman getting on the way she getting on. there is no need to meet to talk. A job well done FRUNS

    Reply
  5. Big Man October 4, 2017 at 10:04 am

    Now there is a cash cow it is time to pay Civil servants a raise of pay, waiting 10 years for a raise of pay is a Crime Against Humanity

    Give QEH lil more money to buy drugs for cancer patients,majority of patients can’t afford $1500 per month for the drugs.
    Withholding drugs from cancer patients because they can’t pay is also a crime against humanity

    Reply
    • Carson C Cadogan October 4, 2017 at 1:31 pm

      “”The Queen Elizabeth Hospital (QEH) has started to pay its debt and is in a position to meet its financial obligations to suppliers once again.””

      Reply
  6. Thunder October 4, 2017 at 11:04 am

    It’s a cash cow yet average people still can’t benefit,where is the money from the cash cow going Mr.Minister?,time will tell!

    Reply
    • Carson C Cadogan October 4, 2017 at 1:23 pm

      It is going to pay down the country’s debt.

      Reply
  7. Greengiant October 4, 2017 at 11:38 am

    The money is obviously going towards reducing the country’s dept. If they’re going to rake in additional taxes that’s where it should go. We need to get out of dept and fast.

    Reply
  8. straight talk October 4, 2017 at 4:22 pm

    If the NSRL is raking in all this money VAT should return to 15% and stop taking advantage of poor people.

    Reply
  9. Darson October 8, 2017 at 7:03 am

    I am Chilling the Twist for a Celebration : I said before it is the way to go and I am sticking with my opinion:
    David Thompson alway questioned the way VAT was implemented and I hope when the NSRL get things on track totally .we can revisit some of the Ideas David suggested and put in place better regulated and better policed LEVY on VALUE added to products.

    Reply
  10. Darson October 8, 2017 at 7:17 am

    Thunder : We all benefit from this :
    Question for you ? what is your idea of the people not benefiting ?
    what benefits they are not getting that you would like them to get ,and at what cost to us the tax payers . Do you really believe what you write? or is this some old cliche you use when you are lost for words.

    Reply
  11. bobo October 9, 2017 at 11:59 am

    A Country cannot run on unprofessional disorganize people, a country to survive- Government needs –Organize Entities run by professionals–in knowledge if they don’t produce -their reputation will be on the downfall–lose of job-

    Barbados government entities at present– civil servants are happy to get their monthly pay– they don’t care if tomorrow come, if they do care — ”why” the vat collectors and many others cannot fulfill their jobs– ”Why”

    Reply

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