As the cost of goods continues to rise, there is a call from at least one business group for the Government to consider removing all Value Added Tax (VAT) costs, at least for now.
The call was made during a Joint Select Committee meeting convened to examine the impact of COVID-19 on the micro and small enterprises sector yesterday.
“Shipping costs around the world has increased. To pack a container now has increased and that is not something we can do something about,” Arima Business Association second vice president Sudesh Ramkissoon told the session.
“What the Government could help us with is the costs to clear the container or foregoing VAT for a period of time just so that so much of the increase in costs will not be passed on to the customer.”
Tobago Division of the Trinidad and Tobago Chamber management committee member David Wong also complained about having to dig deeper into their pockets for goods.
“I buy something and sell it with a 25 per cent markup and when I go back to buy it, it’s raised 15 per cent and we all know what this does to the working capital system,” he told the committee.
“And we’ve gone through price increases all of last year and I have five emails already for the week with three suppliers raising prices on 1,000 items on my inventory list, so it’s coming down the line again. When I go to repurchase, I need to find money and all the sales I am doing this month not going to help me buy goods next month so I have to find money to buy it back,” Wong added.
Wong said the pandemic has posed challenges to the global supply chain, as shipping costs have increased, noting that the survival of small businesses are now slim.
Wong also said, “I don’t believe the good doctors are pulling numbers out of a hat and saying this should close down and this should open back up, we could have a carnival and we could do this and that. I need the Government to be sure-handed and sure-footed and say, ‘look, if we reach 1,000 people in hospital, we need to lock it down or once we have less than 600 people in the hospital and the healthcare is robust, we could open back up fully’ and set out lines that I could understand.”
Spas and other businesses that offer luxury services are also struggling with reduced clientele, according to San Juan Business Association president Jason Roach.
“I guess with less disposable income from people losing jobs and employment, it has a trickle-down effect to these businesses that I call luxury services,” Roach said.
Sangre Grande Business Association president Preston Sam also made a similar observation.
“I, myself, being a restaurant owner, you are still not seeing that influx of people coming to the establishment pre-Covid and I think it’s because people are trying to be safer,” Sam stated.
According to chairman of the Tobago Division of the Trinidad and Tobago Chamber of Industry and Commerce, Diane Hadad, businesses are now starting to feel the effects of the devastation caused by the pandemic.
“Even driving from Crown Point to Scarborough, I am able to conquer that in nothing more than five minutes now because there is little movement and people are at a standstill because of fear,” Hadad observed.
Asked about how the six-month-long State of Emergency had affected businesses, Hadad said, “To be fair, I don’t think anybody has a pandemic plan in our drawers and never wrote that business model. So to be fair, Government made the decision based on what was in front of them. However, as we went along there were too many uncertainties in terms of how we are going to operate and having said that, I think we’ve come to a place to know whether there needs to be more lockdown because as someone else said, we cannot do proper forecasting for banking, borrowing, negotiating, that cannot happen under these conditions, so we need to make some ‘bull by the horn’ decisions.”
With the high level of uncertainty over the rising number of COVID-19 cases, the groups said both customers and businesses are being cautious, as they are fearful that another lockdown could be on the horizon.
Asked how the Government could assist businesses in this difficult time, Ramkissoon urged that a percentage of foreign exchange be allocated to small and micro enterprises, even if it is 10 per cent. Additionally, he suggested that these businesses not be made to pay commercial rates for utilities and internet, since he explained that many of them utilise the same or even less than what is used in households. Ramkissoon also suggested that the Board of Inland Revenue waive penalties for late payments, lamenting that businesses “are trying.”
The other groups that attended the virtual JSC meeting were the Trinidad and Tobago Coalition of Services Industries, Tobago Hotel and Tourism Association and the Trinidad Hotels, Restaurants and Tourism Association.