Published by Youri Kemp, Nassau Guardian, March 15, 2024
The Bahamas Chamber of Commerce and Employers’ Confederation (BCCEC) said that it “doesn’t want to assume too much” on the increase in National Insurance Board (NIB) contribution rates creating a wave of redundancies, but hopes that no one has to be laid off as a result.
Timothy Ingraham, its chairman, told Guardian Business that: “The BCCEC has noted the projected increase in the national insurance rate as indicated by the minister with responsibility for national insurance in the House of Assembly. We are concerned that this will possibly increase the cost of doing business in the country, but recognize that it is required to ensure the survival of the fund, which so many Bahamians depend on. It is regrettable that action was not taken earlier to prevent such sharp increases, since the potential financial deficit of the fund has been discussed in the past. We urge the government and NIB to explore all other means which may be employed to ensure the viability of the fund. We are also hopeful that increased economic activity can cause the projected rate to be reduced sooner than the current timeline suggests.”
The national insurance rate will increase by 1.5 percent starting July 1, 2024, and will rise by 1.5 percent every two years for the next 20 years, but the Office of the Prime Minister (OPM) said no decision has been made beyond the July 1, 2024, increase.
Ingraham said the chamber is hopeful that businesses will not have to lay anyone off. If businesses are pushed to the point where they can’t take the pressure, the government should offer up opportunities to reduce costs in other ways, like energy costs
“At the moment it is what it is. I guess the government has decided that they will increase the rate. The prime minister has come back and said that as this increase is confirmed, they will come back in two years when the next one is due.”
The BCCEC is hopeful that with this NIB increase the economy can grow to an acceptable rate that would allow businesses to absorb the higher rates more easily. “We want more people working and contributing to the fund,” said Ingraham.
“The minister [Alfred Sears] in his presentation indicated that we have three persons contributing to the pension for every one pensioner, but in other Caribbean countries they have six persons contributing to one pensioner. And so if we’re going to expand that number, we need more persons working in the economy, and that hopefully would help to mitigate increases.”
The raising of the NIB contribution rate is something that should have been done 20 years ago, Ingraham pointed out.
“We just have to work with the situation we are in now,” he lamented. “When you consider that the vast majority of Bahamians rely on an NIB pension when they retire, the possibility of not doing anything is probably grimmer than the possibility of doing anything.”
Read the entire news report here >>> https://www.thenassauguardian.com/business/chamber-hopeful-nib-rate-increase-will-not-lead-to-layoffs/article_143b7f5c-e243-11ee-82d5-cb84e12d8913.html
