The Barbados Chamber of Commerce and Industry has submitted proposals to the government aimed at lowering consumer prices by changing the way taxes and duties are calculated on imported goods.
BCCI president Paul Inniss said the chamber had been in discussions with the Minister of Business and Energy over the past year about the Price Compact and the possible expansion of the basket of goods covered under the arrangement.
The BCCI had now formally presented its position, which went beyond simply expanding the categories of goods subject to the compact, he told reporters at a press briefing.
“We actually formally submitted our position on that. In addition to the basket of goods that would be subject to that compact, we also made some proposals around how we can actually reduce the costs of goods to the consuming public by way of looking at the formula around tax computation.”
He explained that the BCCI had been able to demonstrate that changes to the way duties and other taxes were calculated when goods entered Barbados could result in lower prices for consumers.
“We actually were able to demonstrate that there is a way in which the calculation of duties and so forth, on entry to the country can actually result in a direct lower price to the customer.”
Inniss said discussions were continuing while the BCCI was also working closely with the Ministry of International Trade on ways to influence and bring greater control to escalating prices.
He said reducing the cost of goods could not be addressed only through tax measures, arguing that improving the ease of doing business in Barbados could remove significant costs from the economy.
“The first challenge for us in Barbados from a business perspective is the ease of doing business, and the amount of friction, the amount of wastage, the amount of inefficient or very archaic ways of doing business.”
Inniss said businesses were also facing challenges in getting the wider population to embrace change and innovation, noting that innovation often required significant investment.
He said making it easier and more efficient to do business could have a direct impact on the prices paid by consumers.
“The big one for us is the ease of doing business. I think if we can fix that, there’ll be positive consequences around costs. I think we can reduce and take a lot of costs out of how we do business and that will also impact the cost of goods and services.”
Productivity was another critical component of the discussion, as Winston Moore, Professor of Economics and Deputy Principal of the University of the West Indies at Cave Hill, said productivity had a fundamental relationship with prices, economic output and growth.
“When you speak about productivity, you’re essentially speaking about how much output, how much activity you’re generating based on the inputs that you’re putting into the enterprise,” Moore explained.
He said that if a business could produce more using the same amount of labour or capital, it could potentially provide goods or services to consumers at a lower price.
“If I can get more output given the same amount of labour or more output given the same amount of capital, that means that I’m essentially more productive. Not only more productive, but I can actually supply that good or service to the consumer at a lower price.”
Professor Moore added that increased productivity could also generate greater economic activity and contribute to the growth of the country: “There’s a fundamental link between productivity, as well as prices and the growth of the economy.”
The economist pointed to technology and artificial intelligence as among the major factors driving improvements in the productivity of both labour and capital internationally.
But he warned that Barbados must ensure it did not fall behind as technological changes continued to reshape economies and businesses around the world.
“One of the important things we must do as a nation is that we have to make sure that not only are we utilising these technological services, but we’re not falling behind.”
He said this would require investment in training and technology to ensure that both Barbadian companies and workers were equipped to make the best use of new tools.
“It needs investing in training, investing in the technology to make sure that our companies and that labour is also trained to best utilise this technology at the end of the day.”
(JB)
