Deloitte Barbados Budget Review & Insights
NO NEW TAXES!
This was the message loudly sent by the Prime Minister as she delivered her Budget speech for the fiscal year 2023-2024. Noting that the main focus was to engineer and unlock growth, the Prime Minister announced the creation of a National Growth Council, a Fiscal Council along with a National Strategic Council under the mantra of ‘Barbados Delivers’. Notwithstanding that the critical issues facing the Barbados economy include but are not limited to:
- The ongoing management of the debt to GDP ratio
- The creation of jobs
- Enhancing revenue collection
- Boosting and maintaining economic growth
The Prime Minister seemingly took a balanced approach by blending Keynesian policies and supply side economics. Indeed, no new taxes would keep consumer demand at least at existing levels, given that it’s a critical driving force of the economy. The plans to expand infrastructure inclusive of the new agencies, facilitating access to loans and financing and the recent wage increases in the public sector is the classical approach to expanding fiscal expenditure. The Prime Minister reiterated her Government’s commitment to improving the business facilitation climate, hence the introduction of a Barbados Ex-Im bank, the Sustainable Industrial Development Bill, StartWise and a Unit Trust Corporation. These, along with efforts to remove some of the obstacles to doing business should assist with the growth agenda.
This budget proposes an important government infrastructure and institutional investment programme to the tune of BBD170M over the next three years. The Prime Minister reasserted a commitment to the expansion of housing, repairing roads and expanding the fleet of electric buses. Additionally, the ambition to make Barbados a logistics hub of choice and the introduction of a robust governance regime to ensure the efficacy of customs and other tax concessions are commendable measures that should have the potential to crowd-in much needed foreign private investment.
In this budget, Government’s ongoing efforts to promote economic development does not include any tax-related measures, but we imagine that the provision of tax or other incentives to encourage investment and competitiveness in new industries will soon be on the agenda. Attracting new hi-tech enterprises and the right talent would provide the fuel for the engine room of the economy.