Mixed reaction to Budget Speech from entrepreneurs
The Budget Speech had a mixed reaction from the small business community yesterday.
Budding entrepreneur, Ahmani Peets, expressed disappointment that there would be no import duty relief in the coming year.
The 19-year-old has been running Ahmani’s Cookie Company for three years.
“I am doing very well and I have my cookies in 14 different locations,” he said.
He is almost at the point where he can hire staff, but a major stumbling block has been the rising cost of ingredients.
“If taxes went down it would be helpful for hiring people,” he said. “For a business like mine the taxes on what l import did not change (in the Budget) and they are at 75 per cent for most items. The prices go higher each week with imports.”
An item that cost him $119 to bring in a year and a half ago, now costs $171.
So far he has had enough volume to avoid raising the prices on his products.
“Shipping and import tax is a very big thing to be aware of when in business and it seems that will continue to rise,” Mr Peets said. “l have seen the costs that occur with hiring and it is just important to be very smart with your choices. My generation will be responsible for coming up with ways to pay the debt we have.”
The Budget Speech did, however, announce a reduction in other fees such as payroll tax for workers who earn less than $96,000, and a reduction on fuel import taxes.
Keerome Maybury, owner of Traveler Charters Bermuda, a yacht charter business was more optimistic about the Budget Speech.
“Overall as a Budget speech, it was pretty decent,” he said. He was just getting ready for whale watching season.
“It more or less fell in line with expectations and intuition surrounding this pandemic timeline,” Mr Maybury said. “Obviously, that is speaking to nearer term issues that had to be addressed. I don’t think there was much that was said that came as a shocker as far as understanding the challenges and expectations for improving into the next two to three years as far as the projections are concerned.”
Mr Maybury said the Government had done a good job of meeting the charter industry’s needs throughout the pandemic.
He said the Bermuda Economic Development Corporation’s financial assistance to small businesses, payroll tax relief and unemployment benefits were all a good show of support.
In the Budget Speech Mr Burt said: “With increased funding support from the Government, the BEDC continues to deliver on initiatives such as its direct lending microloan, financial grants, and loan guarantees that provide greater access to capital for our local entrepreneurs.”
He said the BEDC had also recently increased its maximum guarantee capacity from 50 per cent to 75 per cent to enhance financing opportunities. And through its new Start-ups Payroll Tax Relief programme in 2018-19, BEDC has facilitated 73 businesses starting up resulting in 110 new jobs.
Mr Burt said payroll tax relief and unemployment benefits will be extended out for another six months.
All this was good news to Mr Maybury.
“Kudos to the traditional lending grants and hybrid financing they are offering,” he said. “Our staff did benefit from the unemployment benefit.”
Mr Maybury was also glad to see government policy shifting away from restrictions to more of a focus on vaccination and common sense.
He welcomed news that the Government is looking into extending concessions for the hospitality industry to encourage the building of more hotels on the island.
“I agree whole heartedly that it is hard to make the case that Bermuda is an attractive option for hotel development,” Mr Maybury said. “It does mean given that to offset that lack of attractiveness from a financial standpoint, we may have to make concessions.”