Government’s decision to move the Office of the Supervisor of Insolvency into the Ministry of Finance is another essential step to improving the business environment in Barbados.
This view was expressed by Minister in the Ministry of Finance, Ryan Straughn, who said at this juncture, it was now necessary to have that Office in the Ministry of Finance, in order to expedite the resolution of private sector matters where agencies such as the Barbados Revenue Authority (BRA), the National Insurance Department (NID), the Customs and Excise Department (CED) and other government agencies are creditors to the private entity.
Mr. Straughn said over the years, a number of companies had filed for bankruptcy and presented proposals to the Office of the Supervisor of Insolvency.
“Some of these business are also heavily indebted to the Barbados Revenue Authority and the National Insurance Scheme and they required the intervention of the Ministry of Finance to provide relief from penalties and interest and other tariffs and fees.
“The move forms part of the Ministry’s work to create an early economic warning system which includes institutions such as the Central Bank of Barbados, BRA, NID and the CED, to ensure that the Ministry of Finance has a fuller understanding of what’s taking place within specific segments of the private sector, so the appropriate policy response can be developed and implemented to enhance the business environment,” he explained.
He noted that the BRA and the NIS are the two entities that every private sector business interacts with at least on a monthly basis and as such, he stated, it was important those institutions viewed themselves, not just as tax and contributions collectors, but having an in-depth understanding as to what were the critical factors driving the performance of businesses.
“Regulating for growth and not just collecting monies must now be at the centre of how both BRA and NIS function, so the Ministry of Finance will always have a good view of what is happening in the economy.
“Quite frankly, if there are no businesses open, you cannot collect any national insurance contributions or taxes. So the government and its critical institutions have to respond to an increasingly dynamic and rapidly evolving business environment from a policy perspective, hence the need for urgent reforms to the way they conducted their business with the private sector,” he explained.
Mr. Straughn said a new Insolvency Bill would be coming on stream later this financial year. He noted that trustees appointed to deal with receiverships have, for a very long time, complained about the length of time to wrap up such matters, especially when it involved government agencies.
The Office of the Supervisor of Insolvency was established by the Bankruptcy and Insolvency Act (BIA), Cap.303 of the Laws of Barbados. The BIA is the legal framework by which trustees and employees of the Office of the Supervisor of Insolvency administer and oversee bankruptcy and insolvency transactions. When businesses or consumers cannot pay their debts, they may file for bankruptcy or make a proposal (a payment arrangement with their creditors to prevent bankruptcy) in order to continue as a going concern.