Barbados government should lower taxes on tourist rental cars

coconut car rentals barbados

“I am pleading with the Minister of Finance to reconsider lowering the rate of VAT on car rental for at least our overseas visitors. Car rental is a critical component part of our export tourism offerings.”

Hired cars unreasonably expensive in Barbados

Adrian Loveridge - tourism expert, hotel owner

Adrian Loveridge – tourism expert, hotel owner

Whether travelling on business or pleasure, I usually hire a car, because for me it adds a huge extra dimension to the experience and dramatically increases the options available.

With an imminent budget on the horizon, I would implore the Minister of Finance to look again at our car rental sector, if we are going to maintain the recent increase in visitor arrival numbers.

Personally I do not think this segment of our tourism offerings gets the attention it deserves and that is probably partially due to the lack of knowledge and understanding of the enormous contribution it makes.

Just one of our larger vehicle rental operators has a fleet of almost 130 cars. If you average a rental period at 7 days, with a driver and at least one passenger, that amounts to over 13,000 persons each year. Of course the fleet size varies enormously, but from recently writing to over 30 Barbados based entities offering car rental, it gives you some idea of the importance in economic terms they play overall.

Rarely do I pay more than US$150 for a week’s rental in North America or GB Pounds 100 in the United Kingdom for a compact car, so for many of our visitors it can be quite a shock to pay what are considered ‘normal’ rates on Barbados. But it’s easy to see why, because of the taxes on purchasing cars here is staggeringly different to those where our major source markets emanate from.

Also surprising is the sad and difficult to understand logic behind the decision not to lower the rate of value-added-tax (VAT) on vehicle rental when the adjustments were recently made to hotels and some restaurants.

Perhaps it is because our tourism planners and policy makers do not fully understand the secondary benefits and economic importance that the flexibility of having a rental vehicle brings. It enables our visitors to sample more restaurants for lunch and dinner, patronise our attractions, activities, increases shopping options and generates fuel purchases among others.

All of which put additional non-refundable VAT and other taxes into Government coffers.

So on their behalf, I am pleading with the Minister of Finance to again re-consider lowering the rate of VAT on car rental for at least our overseas visitors and treat it like it is, a critical component part of our export tourism offerings.

Any administration must eventually understand that there are only so many ways you can collect taxes, before there is resistance and the level of taxation becomes a direct deterrent.

The question also has to be asked is, that if car rental was more affordable would more people hire vehicles? It would appear so, if we apply the same scenario to other component parts of tourism, like hotels, air travel, reductions in dining costs etc., so could it not work for car rental?

Thirdly if more visitors hire vehicles would there be a greater overall spend across all sectors of the industry?

Finally, would Government benefit overall with the collection of duties and taxes collected on additional fleet vehicles being purchased, fuel consumed, driver permits, increased employment, repairs and servicing etc?

I think the answer to all these would be a resounding YES!

Photo courtesy of Coconut Car Rentals

30 Comments

Filed under Barbados, Barbados Tourism, Barbados Transportation, Economy

30 responses to “Barbados government should lower taxes on tourist rental cars

  1. PLANTATION DEEDS FROM 1926-2015 AND SEE MASSIVE FRAUD ,LAND TAX BILLS AND NO DEEDS,DLP AND BLP MUST GO VOTE CUP

    What will be People get out of this? More taxes to make up for what tourist dont pay? We the People have enough Pain, Everyone seem to afford to live in Barbados but the People who are Born here and have no where to go ,
    2018 DLP gone BLP gone VAT Gone Vote CUP

  2. yatinkitesy

    We obviously can`t compare our Car rental rates to the US, Our comparison has to be with other Caribbean Tourist destinations.If you do that, our rates are not out of line at all.Even St Maarten and the US Virgins that are pretty much duty free, have car rental rates close to Bajan rates. Are we to also lower meal prices at Restaurants to US levels?It is impossible for this Government to give out any more Tax Free, duty free, Vat Free concessions, if Public Services for locals and visitors are to continue and be improved.
    My guess is that if duty was illuminated on H cars, many Bajan car buyers would overnight become hired car operators..fleet sizes of existing (and obviously profitable) agencies would never increase enough to justify a duty free supply of cars.
    During the Winter season every car rental agent is sold out…so the rates could not be that much of a deterrent.
    Adrian, to make the argument that lower car rental rates are necessary to maintain the increase in visitor arrival numbers is a bit extreme .

  3. eliminated, not illuminated (damn spell check)

  4. Go on knock the door

    Adrian tell me where do you hire car from in the uk for £100 for a week

    Obviously not been to the UK for a while

  5. Adrian Loveridge

    Go on knock the Door,

    HERTZ collect Gatwick – 12 JULY (peak time) (Kia Picanto or similar) 7 days with unlimited mileage and ALL taxes GBPounds 94.46 through American Airlines website. Time to do some homework before you make silly (and untrue) statements

  6. Anonymous

    AA website only shows rentals with Budget or Avis . All cheap rentals in UK are manual shift and do not include Insurance. Compare an automatic , AC, small car including insurance with Barbados rates and the difference in price per day is not so bad . Let’s always compare apples with apples .

  7. Adrian Loveridge

    Anonymous, I don’t know why you would set out to deliberately mislead people. Just went back onto the AA and definately HERTZ. I made no mention of automatic or manual and in the UK I have always driven a manual. Insurance is included.

  8. Anonymous

    Kia picanto , automatic, four door, AC, insurance included, one week in Barbados from Stoutes , July 12 to 17 .. £230 . ( approx with conversion rate today)
    I think that is quite a reasonable rate, and should certainly not deter any UK traveller from vacationing in Barbados and renting a car.
    Renting any automatic transmission car in the UK is ridiculously high compared to manual shift models.

  9. Adrian Loveridge

    Anonymous, Again NOT true. Mercedes C Class AUTOMATIC for same 7 days with AVIS at under GBP 180 including ALL taxes and insurance.

  10. Anonymous

    I dont know what AA website you are looking at, but its great. I have no intention or reason to mislead people..I’m seeing from Avis, on AA website,, the Mercedes you refer to for 7 days, July 17 to 24, for US 1081.08 including taxes. DOES NOT include insurance.Thats about GBP 706.00 so either you have access to a special website to get a quote for “under GBP 180, or you are dead wrong. Check again Adrian, you are not always right.

  11. Adrian Loveridge

    I have been in the travel industry since 1966 across over 70 countries including 4 years as a Travel Agent. I clearly seem to be able to find alternative and cheaper rates than you do. I will happily make the actual bookings at the rates I have quoted and email them to you.

  12. Anonymous

    You are right about the Kia and Hertz , but not the Mercedes…stick to the Kia.

  13. Anonymous

    You said the offer was through AA website…are there two AA websites…one for amateurs like me and one for seasoned travel industry people like you? I suggest that you are the one misleading people by saying that you can rent a fully loaded C class Mercedes from Avis, for 7 days in the UK , for less than GBP 180. Do you think that you posses some special skills or powers to search for a car on the internet. Give me a break.

  14. Adrian Loveridge

    Two apologies down. Third one to come. Go onto http://www.confused.com
    and type in the dates, Gatwick and go through the list of options. The C class is about 12 or so down at GBPounds 179….
    Waiting for the third apology!!!

  15. Anonymous

    Although you said originally that you were on AA website,However, I went to your special secret website “confused” and did indeed find the Avis Mercedes C class from July 12th to 19th for GBP709.69.
    So sorry Adrian, no apologies..
    Maybe its my Lime connection, what are you using?

  16. Go on knock on the door

    Adrian not surprising a lot of peeps in Barbados don’t like you very much. You do seem to have an attitude problem at times and would seem to deserve all the flack you receive… Maybe better keeping your head down instead of trying to be the tourism minister… coz you are not

  17. Anonymous

    Adrian is sure he can rent a Mercedes C class , automatic, AC, at Gatwick from July 12th for 7 days at GBP 25.50 per day . That’s because he has been in the travel industry since 1966. He also has access to secret travel websites that provide these deals not visible to others who use the internet to find the best rates.
    Come on Adrian , admit you were mistaken. You are only human, I think.

  18. Adrian Loveridge

    As you seem again to doubt my word. I have booked the car as described. Booking ref: is GB312448100 at GBPounds 179. 12 for the week. I have sent an email copy to BFP for them to post. Third apology PLEASE!

  19. Anonymous

    Adrian, my apologies.Thanks to you, I have also discovered something very interesting and useful about hunting for prices of car rentals, and perhaps everything travel related on the internet…I was using a VPN server located in NY when I searched on Confused.com….kept getting a rate of GBP709.69. Tried it on 3 occasions. I then switched off the VPN, and tried again, with my Barbados Lime connection….holy crap! The exact same car, from Avis, same dates is now showing at GBP 179.Its almost criminal, but they have those two rates depending on where they see your search is coming from.
    So, you are not making it up.
    Neither was I.

  20. Adrian Loveridge

    This is not so (geographical origin) uncommon right across the travel industry now, but its a bit of a minefield. I drive a Suzuki, so a Mercedes C Class for a week would be a real treat for me. Thanks for the apology.
    I know that I attract a lot of negative and bashing comments so try and double check before posting anything.

  21. Anonymous

    Ill do better, I just won’t question any prices you quote for anything.

  22. Anonymous

    As someone who has been following this discussion from the UK i have clicked onto the link and all I get is dear insurance quotes. Am I missing something?

  23. Anonymous

    Sorry “car” insurance quotes.

  24. Adrian Loveridge

    Look at the header and click onto Travel and then Car Hire. Its a very interesting website, but I would also compare with other sources. It does not guarantee the lowest price. For instance I found a much cheaper compact car on several other sites.

  25. Anonymous

    Got it thanks.

  26. Anonymous

    So back to topic .. Would lower duties lead to lower rental car rate lead to more tourist arrivals? Hardly.

  27. Adrian Loveridge

    Answer the same question with other component factors

    1) Would lower airfares lead to more tourist arrivals?
    2) Would lower accommodation rates lead to more tourist arrivals?

    The point of the article was to balance the duties and taxes on car hire with what lower rental rates would produce in increased spending at restaurants, attractions, activities, shopping etc.

  28. Barbados Vader

    Adrian I am from the UK and visit Barbados several times a year…however the osts of dining out and most other things are hgh and the world is getting smaller, a lot of peeps I try to get to visit Bim are put off by the high cost when actually on the island. also now I o hear a lot of comments that the island is now dirty and suffers from a lot of violent crime…the Boscobel gang are damaging bim reputation faster tham any advertising or reduction in cost can make the ground back.

  29. Adrian Loveridge

    BD, Vader, some good points and sadly you are right on most counts. We have tried to make certains things like dining, cheaper with our
    re-DISCOVER initiative (www.re-discover.com) but successive Governments have not addressed many of the issues.

  30. Too much traffic

    Barbados used to be safe and clean enough and a fun place to visit. It’s lost a lot of the magic though due to garbage, crime and traffic traffic traffic.

    And more traffic!