Barbados international business sector growing
Wednesday March 16 2011 | 02:25 AM

Growth continues to occur in the international business sector says the minister responsible for that sphere of activity, and he adds that a study being done to determine that sector’s contribution to the overall gross domestic product should be completed in another three months.

Member of Parliament for St. James Central, Minister of International Business and International Transport, George Hutson, made these disclosures while speaking in the House of Assembly yesterday during the Estimates Debate.

He told the Lower House that in 2007 there were 3 156 such business entities licensed in Barbados during that period and at the end of 2010, that figure stood at 3 725 – an increase of approximately 20 per cent. Minister Hutson said given that increase of almost 600 companies, it would suggest that there are more persons also being employed, which itself can result in revenue for the Government.

“It stands to reason that if there has been an additional 600 companies added, approximately, to the number of listed companies, that there must be more persons being employed within the international business companies. That is a reasonable assumption. Given that assumption then it means that there must be increased personal income tax coming from the sector and of course when one thinks in terms of the multiplier effect, of the additional contribution to VAT and so on, the sector cannot just be judged from the point of the contribution to the corporation tax,” he maintained.

Meanwhile, responding to concerns about the corporation tax receipts in relation to the international business sector falling over the 2009/2010 period, Hutson said while it is a fact, it has to be considered within the appropriate context.

“...The profitability of those companies is dictated not by what is happening in the Barbados economy, Mr. Speaker. Those companies are trading outside of Barbados and the profitability of those companies is to a large extent dependent on what is happening in the economies in the UK and in Canada, in North America, where most of the financial activities operating in the international business sector is undertaken. So if there are challenges in those economies, if those economies are on a downward spiral, obviously the profitability of companies that operate within our international financial sector will be down and obviously by extension the corporation tax take would be down,” he explained.