By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Some 75 percent of corporate leaders in The Bahamas and Caribbean fear their plans will be impacted by new and/or increased taxes to help pay for elevated debt levels sparked by COVID-19.

The finding was revealed as part of the PricewaterhouseCoopers (PwC) accounting firm’s 24th annual global chief executive survey, which found that company chiefs in The Bahamas, Jamaica, Bermuda, Barbados and Trinidad & Tobago are increasingly focused on combating cyber security threats and slightly less optimistic than their counterparts elsewhere about prospects for a post-pandemic rebound.

The survey, which polled 5,050 chief executives in 100 countries over January and February 2021, including those in the Caribbean for the first time, found that three-quarters of the region’s corporate leaders agreed that tax policy changes to address rising government debt levels will impact their company’s decision-making and planning moving forward.

Many observers in The Bahamas believe that the government, facing a projected $900m-plus deficit in the upcoming 2021-2022 budget year following a record $1.327bn of ‘red ink’ in this fiscal period, will be unable to address a national debt forecast to exceed $10bn by next year without resorting to new and/or increased taxes.

“Chief executives are undoubtedly watching debts accumulate as governments intervene with stimulus packages, and realise that business will eventually need to pay its fair share,” PwC said. “Cross-border competition seems likely, as governments develop tax schemes to benefit their national interest, creating significant complexity for multinationals with global operations.”

Elsewhere, 69 percent of Caribbean chief executives said the expect the global economic outlook to improve over the next 12 months, which was slightly more pessimistic than the 75 percent of global corporate leaders giving a positive response.

And Caribbean business leaders were also more concerned about emerging cyber threats in the digital economy, with 67 percent ranking this as a priority compared to 47 percent of chief executives globally. Some 86 percent of regional corporate chieftains told the PwC survey they plan to increase investments in cyber security and data privacy.

The findings disclosed that Caribbean chief executives plan to make “double digit increases of ten percent or more” in accelerating their transition to the digital economy over the next three years. The regional private sector was also more worried than its counterparts about uncertain economic growth; pandemics and other health crises; and exchange rate volatility.

Prince Rahming, PwC Bahamas principal, said of the survey findings: “After the tragedy and turmoil of the past year, the shift in sentiment is encouraging. Chief executives are confident that growth will return, boosted by successful vaccine programmes in many parts of the world. We’re pleased to have had Caribbean chief executives provide their insights for the first time this year.

“Although the outlook is positive, there are still significant challenges ahead in a world that has changed fundamentally. People expect more from businesses. This includes the heightened focus on sustainability, social inclusion and other environmental, social and governance (ESG) issues. It’s vital that businesses meet these expectations if they are to build and sustain consumer trust.

“To take on tomorrow, chief executives will need to accelerate digital transformation and workforce upskilling as businesses look to drive innovation, sharpen productivity and ensure the right outcomes for customers,” Mr Rahming continued.

“The organisations that rise to these challenges will emerge stronger, more resilient and able to steer successfully through this period of momentous change. When aligned to the focus on ESG, this uplift in capabilities can also provide the foundations for building back better and delivering for stakeholders in the years to come.”

PwC, summarising its Caribbean findings, said: “Cyber threats are the top concern for 67 percent of Caribbean chief executives, likely in response to a rise in cyber attacks over the past year. Also rising rapidly on the list of chief executive concerns is the spread of misinformation (78 percent).

“This coincides with the acceleration of companies’ digital transformations during the pandemic. Over half of chief executives plan to increase their investments in digital transformation by 10 percent or more with no plans to slow down.”

While more optimistic about the economic outlook, the impact of climate change is becoming a growing concern for the Caribbean private sector. “Chief executive optimism extends to their own company’s performance,” PwC said of its survey.

“In the Caribbean, 78 percent say they are either somewhat confident or very confident about their organisation’s prospects for revenue growth over the next year. Even more positive, 88 percent are confident looking ahead three years.

“One third (31 percent) of Caribbean chief executives have factored climate change into their strategic risk management activities [compared to] 37 percent globally,” the accounting firm added.

“Some of these chief executives are located in countries with high natural hazard exposure so we might expect this figure to be higher and businesses to be better prepared for climate change risk. In contrast, 82 percent of chief executives in the Caribbean selected climate change as a concern. Fifty-nine percent of them are somewhat concerned and just 24 percent extremely concerned.”