BIBA reacts to proposed new fees
Thursday October 15 2009 | 03:21 PM

As Parliament prepares to enter a further round of debate on Government’s proposal to increase license fees for financial institutions, international business interests in Barbados are sounding a note of caution.

Executive Director of the Barbados International Business Association (BIBA) Henderson Holmes said the proposed new fees marked a 300 per cent increase over what currently exists and, while BIBA recognized Government’s need for additional revenue in these challenging times, it was concerned at the negative impact this could have on Barbados’s ability to compete as a jurisdiction of choice in the region.

 Last Tuesday, the House of Assembly approved two Bills: the Financial Institutions (Miscellaneous Provisions and Validation) Bill 2009 and the International Financial Services (Validation) Bill 2009 that covered the proposals made by Prime Minister Thompson in his 2008 “Budget” for the licence fee for insurance companies to be increased from BDS$5 000 to BDS$$20 000; and for the license fee for international banks to be increased from BDS$25 000 to BDS $100 000. These Bills will now go before the Senate for approval at its next sitting.

 "We understand the argument that the benefits of infrastructure, education and stability need to be invested in to sustain them at such a high level, but we must point out that the international business sector is already a major contributor to the Barbados economy,” Holmes said.

 He also called on Government to instil confidence within the business community, and prospective outside investors, that the significant jump was not the beginning of an escalating series of fee increases, but a one-time attempt at a long-overdue adjustment.

 The BIBA executive further suggested that the fee increase should be moderated for specific groups, such as captive insurers.

 “Captive insurance is a key part of international business growth for Barbados and when the entire cost structure of the business in Barbados is considered relative to other jurisdictions, especially for smaller captive insurers, these fee hikes will make it very tough for Barbados to compete.

 “It would be a shame for Barbados to lose business over a cost differential of a few thousand dollars simply because these fee increases weren't applied in a market-sensitive manner," Holmes said.

 He also echoed recent concerns expressed in the media by noted tax expert and chair of the Barbados Private Sector Association that these high licence fees could place Barbados at a competitive disadvantage, especially given all the factors related to establishing and doing business in Barbados.

 Holmes said BIBA hoped the fee increases would contribute to the continued investment in the business processes for the success of international business in Barbados, and the organisation looked forward to working with Government to improve the speed and efficiency of our jurisdiction even further.