Tax break call for small businesses
Small businesses need a bigger break on tax, an entrepreneur said yesterday.
And Art Riviere, who owns the Bull's Head Car Wash, called for a sliding rate on taxes to reflect reduced volumes of business.
Mr Riviere, who has run the city car wash for just over ten years, said his business had been hit by a decline in people working in international business and the recession — but that costs had stayed the same or gone up over the same period.
“High taxes, low volume — it doesn't matter whether you're a restaurant, a body shop or a car wash,” he said.
“When the recession kicked in, in 2008, we lost a good chunk of our business. A lot of people left the Island and a big percentage of our business was Americans and Canadians who were used to using a car wash. When they left, a big percentage of our business was gone.
“Even when Government introduced a furlough day for its staff, I had people who stopped using the service. If people lose maybe $300 a month or more from their pay, washing a car isn't a priority.”
He explained that the business had completed nearly 700 fewer car washes in the first quarter of 2015 than the same period in 2014 — although poor weather in the first three months of the year had played a part.
“Somewhere, there has to be an adjustment based on the volume of business. We pay taxes on expenses rather than gross or net income.
“If Government adjusted the tax rate, that would be a help.
“I hear that we're getting out of recession, but I don't see that over here.”
Mr Riviere and wife Sharon opened the business at the end of 2004 — and he said the first few years, as the only automated car wash on the Island, had gone well and helped him service loans taken out when he created the purpose-built premises on Jackson Way, off Dundonald Street.
He had previously run the Wok restaurant on Bermudiana Road but saw a gap in the market in the car-cleaning business.
Mr Riviere said: “I saw the need for this service and this property was owned by my wife's family — it was a good location for this kind of business.
“The first few years, the business was strong enough we were able to pay wages and pay loans and taxes.”
But he added he had been forced to reduce staff numbers from eight to five as demand slowed.
And Mr Riviere said he had done an informal survey of other small businesses — who all had the same complaints.
“If ten of us have the same problem, then something is wrong. We've not got the volume that's required to operate our businesses.”
Mr Riviere said: “We have to be able to pay decent wages to employees so they can cover their expenses. We have to pay well to get good quality workers. And I have to have someone I can train to operate the machine and do a good job detailing the cars.”
He added: “One of the biggest killers is the pension plan put into place a few years ago which is ten per cent — five per cent from the employer and five per cent from the wages of the employee. You might as well say it's ten per cent coming from the employer.”
He added that — although small businesses tended to have few employees — if they were all added together they would make a significant percentage of the total workforce and also of workers with fewer skills, who would have difficulty finding other employment if they lost their jobs.
Mr Riviere said: “Finances are so tight — people talk about going from paycheque to paycheque. As a business, I'm doing the same. There are some weeks I don't pay myself.
“Right now, we see Government having to go through a challenge to pay its debt and they're coming to me to help pay that debt. But we don't have an economy that gives me support so I can afford to pay that debt, and all small businesses are feeling this.”