BREA Press statement on the Implications of 2017 Financial Statement and Budgetary Proposals
The recently presented 2017 Financial Statement and Budgetary Proposal laid before the Parliament of Barbados on May 30th, 2017 triggered a series of alarms from across many of the country’s leading business support and private sector-led associations.
Of chief concern are the introduction of a two per cent foreign exchange transaction levy on the purchase of equipment and related renewable energy gods from overseas and the increase from two to 10 per cent in the National Social Responsibility Levy (NSRL).
It is the conclusion of the Barbados Renewable Energy Association (BREA) that the Budget is likely to have its most devastating impact on and could very well kill the country’s fledgling renewable energy sector.
President of the Barbados Renewable Energy Association Aidan Rogers said this sector has been touted by the Government of Barbados as a potential growth industry and one expected to play a major leading role in the island’s economic recovery. But he added the recent Budget ran contrary to this position as outlined by the government to achieve a 100 per cent renewable energy economy.
The increase in the National Social Responsibility Levy and the two per cent foreign exchange levy would increase operating costs across the sector, force up prices to the consumer and lead to higher unemployment as more companies would close their doors. Efforts to forge a national energy policy which seeks to facilitate the adaptation of renewable energy technologies and adoption of energy efficiency practices and techniques across Barbados would be undermined.
Local manufacturers of LED lights or solar water heating products are among the most at risk of financial ruin as the cost of their foreign inputs would increase. Ms. Meshia Clarke, Executive Director of BREA highlighted that, “rather than purchasing equipment locally it would be cheaper to import these items or move their businesses to other regional jurisdictions and then have those products re-exported to Barbados at a much cheaper cost.”
Local manufacturers of quality products, contributing to reduced foreign exchange and providing jobs would be at risks from inferior, foreign-imported products that were cheaper while local prices were increased.
BREA has called for a meeting with Government and that consideration be given to the exemption of the newly proposed taxes on the renewable energy and energy efficiency sectors.
Rogers said, there was “a lack of ministerial cohesion and policy towards the sector and repeated a call for the establishment of a fiscal working group on energy.” He further went on to state that,
the establishment of a Feed in tariff by the Fair-Trading Commission had been “nullified by the budgetary measures, requiring a review. A new tariff was required as well as a 20-year contractual period to encourage investment.”
Rogers also said, that the advisory committee to Government on licenses to be awarded under the Electric Light and Power Act (ELPA) had been meeting infrequently and it needed to meet at least monthly.
He also called for a transformation of the public transportation system to an electric vehicle fleet. Stating that, “the potential savings that can be earned from the transition to an electric vehicle fleet has the potential to net more savings than the increase the excise tax on gas will achieve,” the BREA president remarked.
Executive Director of BREA Ms. Meshia Clarke underscored the significant, negative impact that the new taxes would also have on the services component of the renewable energy and energy efficiency sector.
BREA said it continued to be keen to meet and work with Government on implementing policy and financial measures that would enhance the development of the energy sector. It said it intended to write the administration shortly on a way forward for the sector.