Chamber: Perceived forex improvement

Gabriel Faria, CEO of the TT Chamber of indusrty and Commerce.
Gabriel Faria, CEO of the TT Chamber of indusrty and Commerce.

TT Chamber of Industry and Commerce CEO Gabriel Faria said on Thursday there is a "perceived improvement" in the supply of foreign exchange (forex). This is because consumer demand has continued to decline, so the deficit between demand and supply has shrunk.

But Faria said, "The challenges with forex have not improved."

Despite the perceived improvement, there is still a gap/shortfall.

Faria said the most troubling thing to Chamber members and the wider business community "is that the aging and value of overdue VAT (value added tax) refunds continue to increase at an alarming rate." He recalled that Finance Minister Colm Imbert said months ago things were being put in place to address long-overdue refunds.

"This has not occurred, and many businesses have contacted us pleading for action to be taken."

Faria said in many cases, refunds take over two months. Should a VAT payment be a day late, however, Faria continued, the company is charged a penalty and interest.

"This is a major issue and without corrective action, it could mean lay-offs of staff, quite possibly closures of businesses, as they are unable to meet their financial commitments."

Faria outlined the Chamber's concerns about outstanding VAT refunds to Imbert in a letter dated March 1, 2018.

In the letter, Faria said information the Chamber received from business service organisations suggested refunds over two years would be in excess of $50 million. Acknowledging Government's cash flow challenges, the Chamber made some recommendations to bring relief to these companies. One was to allow companies to offset refunds owed to them with VAT payments due, based on the Board of Inland Revenue's confirmation of the refund amount.

In a statement, Scotiabank said there had been no significant changes to the forex distribution system during the last year. The Central Bank continues to provide stability via periodic injections of forex into the market which are utilised by forex dealers to sell to clients with forex demand for trade purposes. Checks on the Central Bank website showed the sales of forex to the public by all authorised dealers was US$5,677,430.

Purchases of forex from the public by all authorised dealers was US$4,101,400. Forex purchases from the Central Bank by all authorised dealers was US$1,501,000. The purchase of forex from the public by all authorised dealers in 2017 was US$1,816,600.

Scotiabank said it continues to support the economy by providing forex to its corporate, small business and retail clients across all sectors of the economy. This includes focusing the distribution of forex towards meeting trade-related demands as well as retail demands for medical, travel and educational purposes.

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"Chamber: Perceived forex improvement"

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