Article taken from the Daily NationNews – Thursday February 23, 2022
THE OFFICE OF THE SUPERVISOR of Insolvency is seeing “an exponential increase” in black-owned businesses.
Not only that, said Supervisor of Insolvency Esther Springer yesterday during discussion on the Appropriation Bill, 2022, the COVID-19 pandemic has shown that “a lot” of Barbadian businesses were on the edge of insolvency.
“As part of our mandate, we are required to document the causes of bankruptcy and insolvency and what we’re seeing in our businesses, we recognise especially and I didn’t want to refer to race, but we see an exponential increase in our black businesses coming before us. “They are unaware of the ability to costs their products, their statutory obligations in relation to tax, to national insurance, the obligation to, if they are employers, in terms of calculating vacation pay, and these are things that have strangled the businesses from the outset.
“The COVID-19 pandemic, what it did is to further reveal a lot of our businesses were already skating on the edge. What we’re seeing now is a situation where we recognise that … we need to change a culture. We are not treating the area as important as it should. We have situations where when clients come to us under the Dealing with Debt programme, and we as we go through their financial affairs and we look at cost savings, we realise that they are unaware of the charges in terms of the banks.
“When they look at their savings, they’re seeing deductions of $4.50 for point of sale, or $3 at the ATM, and they were unaware that these charges existed. We need to educate our people,” said Springer during discussions related to Ministry of Energy and Business Development.
The Supervisor told the House of Assembly that “a whole government approach” was needed to bridge the existing fractures and Barbados’ taxation and enforcement policies in relation to “both NIS and taxation need to be adjusted to facilitate”.
She stated that during the recent exercise to collect taxes from businesses which were “assessed for periods if they had not been registered”, “a flood of persons” went to their offices “trying to determine how they were going to deal with the debt that they had to deal with”.
Springer said people had to be educated about. among other things, needing “a clearance” to obtain certain concessions, and how to take advantage of certain benefits.
“We deal with persons who are already in a financial crisis, but these problems are systematic and need to be dealt with even at the level of our schools in terms of what we teach our children. Our people are risk averse, so when we speak of introducing topics and training on investment, we need to recognise that we need to start at the very beginning, their spending habits, corporate governance in our business.
“We have business people who are highly skilled but they’re functionally illiterate. We have clients that cannot read, write, or spell but they own a business so yes, training is necessary. How are we going to address these issues if we don’t recognise that the area is important and that the training is needed.
“What I will say is that in an effort to ensure that we have a fair and balanced personal and corporate insolvency regime which not only promotes investor confidence but also supports economic growth, we recognise that programmes such as our soon-to-be launched Money Smart programme is necessary, which is basically aimed at educating our people about the implications as they try to take advantage of financial services products,” said Springer. (GBM)