BMA wants government to revise fuel tax
Wednesday April 06 2011 | 04:23 AM

As some manufacturers buckle under the weight of high fuel prices, President of the Barbados Manufacturers' Association David Foster is calling on the Freundel Stuart Administration to look at restructuring the excise tax on fuel.

Speaking at the launch of BMEX 2011 this morning at the association's Harbour Road, St. Michael offices, he said that the "significant increase in the price of fuel and in the cost of electricity" had impacted on businesses.

Foster, who is also the Managing Director of Roberts Manufacturing, as well as a director and general manager at Pinnacle Feeds, also said: "Obviously we see commodity prices on the rise in general and recently we saw an ad by ADM Barbados Mills with increase product prices.

"I can tell you we've (Roberts) taken up the price of our oil, margarine, and feed in the past few months and all of these things do impact on the cost of doing business here in Barbados.

"Obviously, one of the things we would like Government to look at, is because most economies are driven by fuel and energy, is how can we - I wouldn't like to use the word subsidise - but when we're looking at making a mark up or putting an excise tax on these things there is a percentage. Twenty per cent on a $1,000 margin is different to 20 per cent of $2,000.

"Obviously I think the Government needs to look at the whole structure that we currently have in terms of the excise taxes on fuel. It impacts every part of our economy from Barbados Light & Power right through to every industry," Foster said.

The BMA's Executive Director Bobbi Mckay said although she had not heard from the manufacturers directly, she was aware they were having problems.

Some of them, she said, had resorted to using generators. She also said that in spite of the recession they had "a lot of new members" signing up and noted the sector was crucial to the security and safety of Barbados.

Earlier during his address, Foster said "it is clear that many manufacturers still consider BMEX to be a viable and exciting platform to showcase their ingenuity and craftsmanship" and what he would like to see is a "more level playing field" for them.

He noted further that manufacturing was "a crucial part of our economic development and stability and must be recognised for its contribution" as the benefits were employment, economic stability, career development and an increase in personal and national wealth.

"Manufacturers continue to make a vital contribution to our economy, often in the face of unfair competition. We are not saying that manufacturers should not be expected to compete on the global stage but what the industry is seeking is the removal of several disadvantages that our manufacturers experience and to have a more level playing field.

"With some regularity, manufacturers face increases in energy, commodities, wages, property taxes, etc. With this as their reality they are still being asked to compete against countries which operate at a fraction of the cost of our local manufacturers, based on natural resources and economies of scale.

"Simultaneously, our manufacturers are facing increased local market access from the EPA and other negotiated treaties. We also see a wide range of products coming into Barbados from countries which do not adhere to ILO rules, countries that pay their workers as little as US $27 a month. We see some products that do not even conform to local labelling requirements. These products find their way onto our shelves, while Barbadian manufacturers are expected to uphold the required standards or our products can get pulled.

"We work assiduously with our manufacturers to ensure that they conform to the required labelling requirements; that they have the date of manufacturing, best before date and nutritional data on their labels. Yet on some supermarket shelves you can find products that are not even labelled in English. This hinders the consumers' ability to read their labels," Foster said.

He outlines some of the other issues affecting the manufacturing sector, which include "the fact that information on imports is not easily accessible".

The BMA president asked: "How can we therefore truly know our import cost, strengthening our call to increase the support for local business, reduce imports and decrease foreign exchange expenditure?

"If we look at the big picture we need to strengthen our national economy if we are to survive. We need to reduce our import bill and increase our exports. Manufacturing is a key component of the national economic mix and so no meaningful discussion about the growth of this country can take place in the absence of manufacturing input.

"We face surmountable challenges as manufacturers; challenges that test our resolve as well as our financial and human resources. We are embracing our challenges as opportunities on the road to success, seeking opportunities to enhance our efficiency ... ," he added.