Cameco tax case is scary for Barbados!

How a Canadian company avoided 1.4 billion in taxes by using an offshore subsidiary and what it means for Barbados

by Not Taken

Yet another interesting and scary for Barbados article in the business section of a major Canadian newspaper, The Globe and Mail: Cameco’s $800-million tax battle

I have been sending these recent articles as a public service so the Ministry of Finance and the Barbados Central Bank Governor have a heads up on the attack on Canadian tax evaders/avoiders that is undoubtedly about to hit the Barbados offshore industry; if in fact it has not already hit – but unreported.

This is very bad news for Barbados revenue sources.

While the Cameco case involves its Swiss subsidiary, it is probably just the tip of the iceberg in CRA’s efforts to collect taxes due to Canada. There must be hundreds, if not thousands, of  “Canadaco (Barbados) Limited” businesses doing the same same transfer pricing schemes (scams) in order to pay 2% income tax to Barbados, rather than 27% to Canada.

Even those Canadian companies not not already being audited for this this type of tax “management” may decide for close up shop in Barbados to avoid the publicity that a CRA audit will bring.

Cameco’s CFO, retorts that Cameco Europe has its own board of directors and a full-time CEO, Gerhard Glattes, who has no other duties with the company. Cameco Europe provides Cameco with compensation for the management duties – like legal advice – it does not have its own staff for. “It was established in accordance with all relevant laws and regulations when it was set up.”

The Barbados registered Canadaco subsidiaries’ own boards of directors and full-time CEOs who have no other duties with the Canadian company should start planning for alternative sources of income. And of course it will have serious implications for the Barbados services providers; the legal community,  the management/bookkeeping companies, and the accountants when it happens.

A symbol of our troubles: Tattered Barbados flag waves over stalled Four Seasons

Welcome to the Four Seasons, Barbados

The symbolism in the photo is stark: clouds obscure the Caribbean sun as weeds grow around a faded and ripped Bajan flag at yet another failed mega-project. A piece of garbage on a dead lawn provides the finishing touch.

Greed and politicians did this – mostly men who thought they were experts in leadership and running a country because they made speeches and got theyselves elected. The results of their decisions stand rotting in the sun all over the island: half built condos, closed hotels and crumbling steps. I’ve lost count of the sludge-filled swamps that used to be swimming pools surrounded by a hundred happy tourists baking and drinking Bajan rum.

It’s all over now and we did it to ourselves.

If we keep on blaming ‘the economy’ and 9/11 and Cuba we are headed only one way and that is down.

This is where we are now. Our best coasts and beaches are walled off or defended by thousands of motorcars. Our roadsides are tipping spots, while sullen shop clerks ‘greet’ visitors with about as much respect as you’d give a rat in your rubbish bin.

This is where our leaders have brought us, and when their time is up they head for Canada or Switzerland or Florida.

That’s where we are. The question is; what do we do now?

Four Seasons flag photo courtesy of The Nation: Flag shame at Four Seasons

How government makes small, self-sufficient businesses support corporate leeches

Adrian Loveridge, small hotel owner – now selling!

Perhaps more than many, I can totally empathise with those individuals who have recently seen their business either fail or brought dangerously close to insolvency. In 47 years, it has happened to me twice and in both cases they were largely external forces which caused near personal financial catastrophe.

Of course, it is easy to attribute the blame to others, but in my case I can unequivocally state that both near failures, which occurred years apart, were largely caused by strike action in the United Kingdom involving the National Union of Seaman.

I personally witnessed bus loads of what can only be described as pickaxe wielding thugs, destroying property and intimidating ordinary people simply wanting to go about everyday work and operating their businesses. More than a decade later it was the same union blockading the English channel ports, which prevented literally thousands of our booked holidaymakers taking their hard earned trips.

Unless you have been a small entrepreneur and fully understand the work, sacrifice and dedication it takes to grow and nurture a business from nothing, it might be difficult to comprehend the feeling of sheer devastation you experience when all those efforts unfold and collapse in front of you.

Starting a business in Barbados

When we moved to Barbados some twenty five years ago and put our life savings into purchasing a derelict hotel, we were starting all over again.  Not surprising, the local banks we approached were not overly helpful, regularly quoting those seemingly worldly phrases like that we were ‘undercapitalised’ or ‘over trading’.  Little did we know then that these ‘pearls of wisdom’ would come back and haunt the many supposedly ‘responsible’ financial institutions, globally just years later.

Tourist statistics for March… say hello to the Germans!

This just in…

In the interest of fairness and accuracy, retired diplomat Peter Simmons stated on Down to Brass Tacks yesterday that visitor arrivals were down 9 per cent for the first three months of 2013.

While long stay visitor arrivals were down 9 per cent in both January and February, they were only down 1.6 per cent in March.

In fact, cruise ship passenger arrivals were up by 9.2 per cent in March 2013. This is when compared with the same periods in 2012.

What was that old saying about statistics and people who use them?

Okay, so we know life is tough ’bout hey, but what does this mean…

March 2013 cruise ship passengers up 9.2% over March 2012

BUT….

March 2013 overall tourist visits down 1.6% compared to March 2012

TRANSLATION…

We had a couple of bigger boats in compared with last year, but the overall visitors are down.

The Germans are coming! The Germans are coming!

We had an extra 367 German visitors in March 2013 over March 2012. How much did those extra visitors cost us in increased BTA spending in Germany? I know you can’t look at it like that because you have to consider the cumulative impact of advertising, but while the Barbados Tourism Authority people will be happy to talk about the increase in Germans, what do they say about the loss of 385 Canadians and 1,431 Americans during the same period?

This is too heavy for me on a Thursday morning. I need a Banks…

=========================================
.                             March        March        Net YoY           YoY%
.                               2013           2012            Change
=========================================
TOTAL                53,304         54,164           -860          -1.6%
U.K                       18,550         17,601            949           5.4%
U.S.A                12,222         13,653         -1,431         -10.5%
Canada              9,086          9,471           -385          -4.1%
Germany            1,343            976            367          37.6%
Other Europe          2,825          2,459            366          14.9%
Trinidad & Tobago  2,937          2,982            -45          -1.5%
Other Caricom         4,237          4,653           -416          -8.9%
Other Countries       2,104          2,369           -265         -11.2%
===========================================
SOURCE: Barbados Statistical Service

Further Reading

Bloomberg Cruise Stats: Barbados Cruise, March 2013

Bloomberg Tourism Stats: Barbados Overall March 2013

Barbados Government defaults on VAT refunds to business – years behind as unpaid debts mount

Businesses forced to carry debt for the government

Adrian Loveridge, small hotel owner – now selling!

Over the last twenty five years, I believe our small company has been a model corporate citizen on Barbados. We have no outstanding debt to either Government or the private sector, yet next week we will be forced to go cap-in-hand and beg our bankers for an overdraft facility.

Why, you may ask?

Simply to be able to cover our expenses, while we await several VAT refunds totalling over $32,000, which have been overdue for as long as two and a half years.

We are told that all the claims have been approved, but are ‘warned’ not to call the VAT office to chase when payment will be paid. Of course, we have tried to approach Government discreetly by writing to two Ministers with responsible for either for VAT or small businesses, but weeks later, neither have bothered to respond.

Recently under a banner headline in one of the media outlets entitled‘ VAT Division not taking full blame’ VAT division Auditor, Ryan Wiltshire, attempted to spread the blame onto another Government department, stating ‘it was up to the Treasury’.

Frankly, we are not interested, as already it is a burden to prop up as clearly unsustainable huge civil service that has been completely isolated from the reality of operating in the real world of commerce. And it is almost adding insult to injury when you see Government workers driving around in taxpayer funded luxury SUV vehicles.

Rarely a week goes by without hearing one Minister of another spout the importance of supporting small businesses, which are deemed globally as the best vehicles for economic recovery and employment generation.

Sadly, this appears only to be more political rhetoric and it is probably best to cease and desist at this time, as few out there believe you anymore.

Adrian Loveridge

Peach and Quiet (Barbados) Ltd

Barbados Economic Performance – 2013 First Quarter

“Growth in tourism has not be sustained this year”

• 11.6% unemployment in 2012
• VAT receipts down 7%
• Income tax receipts down 18%

I need a rum!

Tax Havens under fire in massive new leak of hidden offshore accounts

Washing money, Hiding money

contributed by “M”

Unlike the mainstream media in Barbados which seems disinclined to report on the financial shenanigans of its politicians/public figures (except the $75,000.00 cheque), the media in Canada has no such hesitation, as seen at the attached link to CBC website.  Other major media in Canada are running with the story. While 38 media outlets around the world are probing the data leaks reported in the material reported in Canada by CBC, I do not expect to read about it in the Barbados papers.

Canadian CBC: Senator’s husband put $1.7M in offshore tax havens

Canadian CBC: 450 Canadians in offshore leak

Yahoo! Finance: Report exposes secrets of offshore tax havens

While Barbados does not figure prominently in this and related CBC articles, I think Barbados authorities should be concerned.

Barbados is the third largest recipient of Canadian outward Foreign Direct Investment, after the USA and the UK; with the principal industry being “financial services”, which I expect is mainly in “offshore” accounts. Canadians are believed to to be the largest depositors in Barbados offshore bank accounts.

It may well be the case that all of those a legal.

Notwithstanding, with the spotlight being shone on the issue of  “offshore accounts” and “tax havens”, and Canadian Finance Minister Jim Flaherty’s pledge in last week’s budget the government will bolster its efforts to fight offshore tax evasion, including launching a new whistleblower line that pays rewards for tips, improving compliance programs and demanding more information on certain financial transactions; it seems likely that some Canadians “investors” will choose to repatriate their foreign direct investments to Canada rather than face the scrutiny for Canada Revenue Agency

Not Taken

US State Department: Barbados politicians ask for bribes and business equity in exchange for favours

The US State Department just published its annual Investment Climate Statement for Barbados. There is some wishful thinking in the report, but also some solid reasons why Bim is a good place for offshore investment. As far as the politicians asking foreign businesses for bribes or shares… That’s news?

You can read the whole thing yourself, but here’s our take on a few interesting spots in the report – the good, the bad and the ugly…

Barbados – The Good

Openness To Foreign Investment

The Government of Barbados, through Invest Barbados, strongly encourages foreign direct investment in Barbados.

The government offers special incentive packages for foreign investments in the hotel industry, manufacturing, and offshore business services.

Foreign nationals receive the same legal protections as local citizens. The police and court systems are unbiased in commercial matters, and the government operates in an essentially transparent manner.

The Bad

On December 20, 2012, Moody’s downgraded Barbados’s rating to one notch below investment grade. Moody’s also gave Barbados a negative outlook, meaning that a further downgrade is more likely than an upgrade. With this downgrade, Moody’s rating is in sync with Standard & Poor’s, which downgraded Barbados in July. Fitch Ratings does not rate Barbados. Moody’s cited two main reasons for this downgrade: poor economic growth prospects and government deficit/debt levels. These are generally the same two reasons Standard & Poor’s cited in July.

The regulatory system can be slow at times, and some companies have complained that the Ministry of Finance does not give adequate justification for rejecting a license.

According to the U.N. World Investment Report, Barbados Foreign Direct Investment (FDI) peaked at $464 million in 2008. This was followed by a decrease to $247 million in 2009. In 2010 and 2011 FDI totaled $290 million and $334 million respectively.

The Real Ugly Stuff

Corruption is not a major problem in Barbados, but some U.S. companies have reported unfair treatment by Barbados’ Customs and Excise Department.

Other U.S. companies have reported efforts by political actors to trade political support for payment or partial project ownership.

Energy & Environment: We cannot continue on the way we have been…

“At best, the age of cheap energy is over…”

Former energy Minister of Denmark

“You need to think of energy in a fifty-year timeframe, and our elected officials are thinking of energy in two year election cycles. That’s ridiculous!”

John Hofmeister, former Head U.S. Shell

One of our old friends sent us a link to the PBS video Earth: The Operators Manual / Powering the Planet – and what an interesting and well-done documentary it is. You can disagree with some of the program or with some of the technologies that are presented as solutions (as I disagree about large scale wind farms) – but you cannot disagree with the theme that we cannot continue on the way we have been. We cannot continue what we are doing. We must find better ways.

Where I disagree with some of the experts is in the area of self generation vs large scale energy generation. The current societal model is to have large central generating facilities – whatever the technology – and accept that over 50% of power generated will be lost during transmission. I say that smaller individual and local community power generation is not only viable, but cheaper and less prone to interruption.

This 1 hour program is well worth your time.

Thanks friend!

Hard times coming to Bim. Are you ready?

“Booming Bim? Here is the current state of affairs at the Almond Hotel. We were there last week and it’s not pretty.”

… an old friend sends a photo to BFP (click on photo for large)

How many people do you know still waiting for VAT and tax refunds? If you’re like us, you know plenty. The government doan have much money these days.

How many people do you know who were laid off in the last year and haven’t managed to find another real job? Answer: lots and lots.

How many hotels and businesses gone or just hanging on? How many shops in the city are understaffed because they laid off the newbies when the “high season” tanked this January?

Been to the Gap lately? You could have Jamaican gang shootouts on the street and not hurt a soul. Maybe we should rent the place out for that purpose… at least then there would be something happening at the Gap!

And let’s not get started about how many airline seats we lost in the last year with Dallas Fort-Worth, Atlanta. Let’s not talk about CLICO, the downgrades or raiding our NIS pensions to “invest” in doomed hotel projects.

We’ve said it before, and we’ll keep saying it…

1/ Shun debt. Shun expenses. Live as frugally as you can.

2/ Work hard, save what you can.

3/ Look after family and friends as you are able because you might need their help someday.

4/ Learn to grow food, repair your own car, maintain your own home. Repair clothes, repair everything. Don’t buy new anything: let some other fool pay the depreciation!

5/ Smile at the tourists, make them feel welcome but never pressured. Pick up the rubbish where you can and never do anything that takes away from the beauty of Bim.

6/ Thank God for what you do have – then get back to working harder than you ever have before.

We can do this, folks. But it can’t be business as usual.

ALERT: Harlequin fails to pay loan interest

“Harlequin refused to comment on the investor’s missed payment, saying that the accounts team is looking into it, and that in the meantime the investor may have to make the payment themselves.”

Temporary delay or something more serious?

Here is what IFAonline posted yesterday:

Harlequin Property hits problems with payments
Author: Laura Miller
IFAonline | 15 Feb 2013 | 10:32

Harlequin Property, the unregulated collective investment scheme (UCIS) which invests in Caribbean property, is having problems issuing payments due under the terms of its agreement.

One investor, who did not want to be named, contacted Harlequin earlier this month after the company failed to pay the interest on a loan the investor had taken out in order to invest in a Harlequin property.

Under the terms of its agreement, Harlequin pays the interest on borrowings where the investor has re-mortgaged their home to invest in a Harlequin property. The interest is paid until the completion of the off-plan property the investor has invested in.

Harlequin said it successfully makes payments to investors, but that delays do occur occasionally.

However, in an email from the investor to Harlequin, seen by IFAonline, the investor informs Harlequin it has not made one of the payments. Referring to a telephone call the investor made to Harlequin, the investor said they had been told by Harlequin that “this was due to errors on the part of Harlequin and many people were affected”.

In an email seen by IFAonline to the investor, Katharine Manderfield, network sales director at Harlequin, said Harlequin has “had some issues with bank payments”. She said the payments will be resolved by 28 February. However, she refused to comment on the investor’s missed payment, saying that the accounts team is looking into it, and that in the meantime the investor may have to make the payment themselves.

“A spokesperson for Regulatory Legal, which is acting on behalf on some Harlequin investors, said: “We have received a number of client enquiries where interest payments have not been made.

“This is blamed on a banking error. We cannot see why this could not be remedied with payments being brought up to date in days…”

… read the rest at IFAonline Harlequin Property hits problems with payments

Barbados yogurt production ends – exposing more hollow government rhetoric

“Whenever practical, buy local.”

by Adrian Loveridge, small hotel owner

When we moved to Barbados almost 25 years ago and  purchased what was a semi-derelict Arawak Inn and beginning our journey in hotel operation, as non-nationals, not surprisingly, only a handful of suppliers would extend us credit. We have remained fiercely loyal and faithful to that small group.

So when PineHill made its entirely unilateral decision to stop producing yogurts it went entirely in the face of a policy we implemented when Peach and Quiet opened: “Whenever practical, buy local.”

“It is almost incomprehensible that this decision by PineHill was made at a time when our struggling dairy industry is trying to survive in the wake of a massive unsold milk glut.”

One or two people have indicated that PineHill did in fact issue a public notice in the media to the effect that they would no longer be manufacturing yogurts. But wouldn’t you, as a matter of course, write to customers that have traded with you for two decades?

After all, we have never been to busy to write and sign, literally hundreds of cheques to them over that period. It almost reeks of arrogance and indifference on their part.

So what do the 160 or so registered hotels, hundreds of villas, apartments and condominiums do now?

In our own case we have been forced to purchase imported yogurts from a distributor, who bring in the French brand, Yoplait. While the individual containers do not show a country of origin, the packaging does and indicates that they are made at their US subsidiary in Minneapolis. So at a critical time, when we are trying to retain every cent of foreign earnings, here we are importing an item that has a long history of local production, that is being trucked and shipped by refrigerated transport over a distance of at least 6,000 miles.

Just think about the carbon footprint for a minute.

Surely the company has to publicly explain why they have chosen this time to cease production and why it is no longer viable? With over 500,000 long stay visitors annually plus sales to locals, cruise ship companies and inflight caterers, what is the problem?

Another point that should be raised, are the recognised health benefits associated with yogurts and would it not be in the national interest to encourage more consumption. Foreign alternatives almost certainly will be more expensive and in these challenging times that alone will stifle demand.

I was also surprised that yogurt attracted 17.5 per cent VAT, as it surely could not be considered a luxury food item, but more a weapon against obesity and digestive disorders. Back on 13th January 2011 under a large attention grabbing Nation News banner headline ‘Bigger Basket’, the then Minister of Trade stated that more VAT exempt items would be added to the ‘basket’. Once again, this appears to be only just more rhetoric.

I really hope that PineHill will re-consider their decision or alternatively take steps to relinquish their near monopoly of milk processing, by giving another manufacturer a chance in Barbados.

The Line in the Sand…

With rights there are responsibilities and while yogurt may seem to some as an insignificant part of the bigger picture, but to me, it’s the line in the sand.

After yogurt, what comes next?

Will PineHill then transfer milk production to Trinidad, because due to energy costs, its cheaper to boil the liquid there?

Wuhloss! Barbados now paying 6% to borrow money.

With United States Treasury Bond yields averaging below 2% over the last 10 years and at record lows, the Central Bank of Barbados is forced to pay 6% on a new $65,000,000 Treasury Note issue. You get the feeling that Central Bank Governor Delisle Worrell is backed into a corner with his list of viable options evaporating in his hand. (Thanks to Barbados Today for the photo)

I really don’t know much about these things – but I do know this: When Barbados is forced to pay three times the going rate to borrow money, we have a problem somewhere…

Central Bank of Barbados : ISSUE OF $65,000,000 BARBADOS GOVERNMENT 6% TREASURY NOTE 2018

General Press Release ISSUE OF $65,000,000 BARBADOS GOVERNMENT 6% TREASURY NOTE 2018
01/29/2013

ISSUE OF $65,000,000 BARBADOS GOVERNMENT 6% TREASURY NOTE 2018

Applications are invited on January 31, 2013 for subscription to this Treasury Note opening on February 01, 2013.  The Treasury Note will be issued at par with a fixed interest rate of 6%payable on January 31and July 31 of each year.  The interest due to Pensioners 60 years and over residing in Barbados will not be subject to withholding tax.

Barbados business community prepares for National Strike – talk or no talks. “Don’t discipline any Trade Union employees”

The talks are on for today, Friday, between Prime Minister Freundel Stuart (above in a past life) and the BWU Barbados Workers Union – but that’s not stopping a few memos from circulating in the business community. Somebody sent them to BFP…

Here they are:

Memo #1

BRIEFING NOTE: SUPPORTED PROCEDURE IN THE EVENT OF A NATIONAL STRIKE

Dear Member:

Given the current state of Industrial unrest, the following recommendations are being made to all employers.

Count your blessings in Barbados!

Landfill Harmonic makes us grateful for everything we have

There’s a space in the corner that I’ve set aside for the day I can afford the guitar of my dreams: a brand-new made in the USA semi-hollow Telecaster with a humbucker in the neck position and a single coil at the tail. I’ve been looking to own that little baby for ten years and I drop hints every Christmas but until things change for the better my dream guitar will have to wait. There will be no new guitars or anything else ’bout this place in 2013 and probably 2014 too.

But how bad do we have it, really?

An old friend sent us the Landfill Harmonic teaser. Lots of lessons in there about working hard, making do and looking after the children no matter how much money you don’t have.

How bad do we have it on this little rock? Not too bad at all, thank you!

Barbados not immune from the coming storm

The Greek experience: terrifying for ordinary people

Can you feel it? Can you see how Europe’s troubles will touch Barbados in a big way?

It doesn’t take a fortune teller to predict the future in Barbados and the rest of the Caribbean. We’ve counted on tourism and offshore banking and excluded manufacturing and hi-tech industries and services. Agriculture is in ruins with sugar a liability not an asset to the economy. We have failed as a region and as a country to embrace energy creation and conserving technologies to any meaningful extent.

Our leaders counted on the same old same old ability to sell our version of the sun, sea and sand that everyone else is pushing at much lower prices. Our tourism plant is old and many of the new projects are stalled or dead in this economy. We have no savings. We spent everything and more during the good years. Our leaders for the last 15 years are bailing out for Canada, Europe and the USA and taking their families with them. In most cases the children have already been educated over and away.

So what can the ordinary folk do? We’ve said it time and time again:

1/ Shun debt. Shun expenses. Live as frugally as you can.

2/ Work hard, save what you can.

3/ Look after family and friends as you are able because you might need their help someday.

4/ Learn to grow food, repair your own car, maintain your home.

It’s coming folks. Can you feel it?

20 Facts About The Collapse Of Europe That Everyone Should Know

Submitted by Tyler Durden

The economic implosion of Europe is accelerating. Even while the mainstream media continues to proclaim that the financial crisis in Europe has been “averted”, the economic statistics that are coming out of Europe just continue to get worse.

Manufacturing activity in Europe has been contracting month after month, the unemployment rate in the eurozone has hit yet another brand new record high, and the official unemployment rates in both Greece and Spain are now much higher than the peak unemployment rate in the United States during the Great Depression of the 1930s. The economic situation in Europe is far worse than it was a year ago, and it is going to continue to get worse as austerity continues to take a huge toll on the economies of the eurozone.

It would be hard to understate how bad things have gotten – particularly in southern Europe. The truth is that most of southern Europe is experiencing a full-blown economic depression right now. Sadly, most Americans are paying very little attention to what is going on across the Atlantic. But they should be watching, because this is what happens when nations accumulate too much debt. The United States has the biggest debt burden of all, and eventually what is happening over in Spain, France, Italy, Portugal and Greece is going to happen over here as well.

The following are 20 facts about the collapse of Europe that everyone should know…

1. 10 Months: Manufacturing activity in both France and Germany has contracted for 10 months in a row.
2. 11.8 Percent: The unemployment rate in the eurozone has now risen to 11.8 percent – a brand new all-time high.
3. 17 Months: In November, Italy experienced the sharpest decline in retail sales that it had experienced in 17 months.
4. 20 Months: Manufacturing activity in Spain has contracted for 20 months in a row.
5. 20 Percent: It is estimated that bad loans now make up approximately 20 percent of all domestic loans in the Greek banking system at this point.
6. 22 Percent: A whopping 22 percent of the entire population of Ireland lives in jobless households.
7. 26 Percent: The unemployment rate in Greece is now 26 percent. A year ago it was only 18.9 percent.
8. 26.6 Percent: The unemployment rate in Spain has risen to an astounding 26.6 percent.
9. 27.0 Percent: The unemployment rate for workers under the age of 25 in Cyprus. Back in 2008, this number was well below 10 percent.
10. 28 Percent: Sales of French-made vehicles in November were down 28 percent compared to a year earlier.

Cost-U-Less will destroy local businesses, and Cost YOU More…

“We created more bribes to get investors to develop infrastructure to attract tourists to our region.  We gave them incentives  because tourism as an import industry brought visitors with blenders to spend in our countries and people were employed to provide services to these guests. 

We have ignored the fact that much of the revenues for accommodation never ever reaches our shores yet we offer subsidies on everything from shrimp to alcoholic beverages.”

Cost-Us-More!!!

by Baba Elombe Mottley

Warehouse chain Cost-U-Less is in line for major concessions when it opens in Barbados in the New Year. But while Minister of Finance Chris Sinckler sees nothing unusual about the concessions, Opposition Leader Owen Arthur is calling them “extraordinary and outrageous” and likely to give the store an unfair advantage over similar businesses in the distributive retail sector.

Showing an April 13, 2011 letter from the Ministry of Finance and Economic Affairs which he said he obtained Friday, Arthur said the document, which was copied to the Comptroller of Customs and Commissioner of Inland Revenue among others, listed exemptions from import duty and Value Added Tax (VAT) on the importation of fittings, furniture, fixtures, equipment, construction material and supplies “for use exclusively in connection with the construction, development, sale and operation of the project”.

It also listed import duty and VAT exemption on personal and household effects and vehicles of specialist expatriate staff, as well as exemption for 15 years from the payment of withholding tax on dividends and interest to shareholders, financial institutions and individuals making loans to the company.

- By Ricky Jordan, Sunday Sun, Barbados

All across the English speaking Caribbean, there is an ominous movement of sorts, a movement of low frequency rumblings without patterns, without form, not like the rhythms of bumbatuk or soca or the one drop of reggae or mento that we are accustomed to.

The essence of all of these known rhythms is that they link us to a past of chattel servitude where there was little choice for self fulfillment.  In time these rhythms. isolated as they were in tenantries and yards and the dancehall, fortified our resolve towards freedom and independence.

Over the last 40 to 50 years, we built indigenous institutions in every sphere, oblivious to the rumblings that were moving across the region. We dismantled the psychological prison of plantation inheritance, killed off the skills we developed to feed and clothe ourselves while we were taught to assemble products that we never used.  We set a precedent by bribing investors that our labour was cheap and responsive to training and we told ourselves we could depend on these jobs.

We created more bribes to get investors  to develop infrastructure to attract tourists to our region.  We gave them incentives  because tourism as an import industry brought visitors with blenders to spend in our countries and people were employed to provide services to these guests.  We have ignored the fact that much of the revenues for accommodation never ever reaches our shores yet we offer subsidies on everything from shrimp to alcoholic beverages.

We’ve arrived! Moody’s cuts Barbados to junk status.

Notin’ much more ta say ’bout dis ya know…

Moody’s Investors Service on Thursday downgraded Barbados’ credit rating to Ba1, into junk territory, citing the Caribbean country’s lukewarm economy and rising government debt levels.

The rating also carries a negative outlook, with the agency saying that the country’s economic prospects remain weak.

“Moody’s believes that the country’s growth prospects remain very limited due to its deteriorating competitiveness and declining productivity coupled with heavy dependence on tourism, particularly from the United Kingdom and the United States,” Moody’s said in a statement.

“While the worst appears to be behind Barbados both in terms of fiscal deficits and economic deterioration, Moody’s anticipates that the government’s deficits will remain large for the next few years and its debt levels will continue to rise, albeit at a slowing pace,” the statement added.

Standard & Poor’s rates Barbados BB-plus with a stable outlook, also a speculative rating.

Reuters: Moody’s cuts Barbados rating to junk, could cut more