Tag Archives: Barbados VAT

What has gone wrong with the Barbados 7.5% VAT?

Current 17.5% VAT killing tourism

Adrian Loveridge - tourism expert, hotel owner

Adrian Loveridge – tourism expert, hotel owner

When Government announced last year that it was passing a bill to allow the lowering of Value Added Tax (VAT) to 7.5 per cent for qualifying hospitality partners my initial thought that it was a wonderful opportunity to at least partially address the frequently quoted high costs of our tourism product.

The criteria did not appear too ominous. That the entity had to be registered with or a license from the Barbados Tourism Authority, Barbados Hotel and Tourism Association or Small Hotels of Barbados Inc, it was in compliance with all statutory obligations of the Income Tax, NIS and Social Securities Act and was able to demonstrate to the satisfaction of the Comptroller and generates at least 75 per cent of total earnings annually in a foreign currency.

In our 26 year experience the vast majority of guests pay via credit card, I would not have thought this was difficult to verify. These imposed conditions would seem quite reasonable and for most attainable.

Why then have so few seemingly eligible tourism partners registered successfully and applied the lower rate of VAT? After all, 10 per cent of the final cost to the consumer is not an insubstantial reduction. Looking at menus posted on the websites of many of our hotels with in-house restaurants or stand alone establishments 17.5 per cent VAT is still shown, which includes some of the big names and (unless they have yet to be updated) state owned accommodation providers are included in this. Interestingly, this applies even to businesses where their owners or managers sit on the board of the national marketing authority.

So what has gone wrong? Is this once again a case of implementation deficit?

Originally the measure was announced in the 2013 budget submission, so does it really take so long to process registration applications?   Continue reading

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Filed under Barbados, Barbados Tourism, Economy

The great multi-million dollar VAT tax rip-off

UPDATED: June 1, 2012

A BPF regular asks…

“Dear friends at BFP,
 
It would be interesting to ask WHAT proportion of the increased VAT collected came from the higher electricity and fuel (petrol, diesel etc) prices and did this make up for the much lower level of corporate taxes paid over this period.
 
Just asking!”

Where does the Finance Minister think this money comes from?

by Colin Leslie Beadon

“Vat Increase brings in Millions” crows the Minister of Finance, headlines Advocate May 30th. And where does he think these millions come from. His crowing is a disgusting abomination. The millions don’t come from the European Union, or the Canadians, or the USA, China, or Russia. These millions come from you and me, dear citizen, from the wealthy, the poor, and the in-between. But they hit the poor and the middle class the most, and these are the backbone of the Island.

And just where will all these ‘millions more’ go?

That is the prime question. They won’t go to pay back what has been taken out of the N.I.S. National Insurance Scheme. Oh no, never happen, they won’t go there. They will go into making more committees, to accomplish more nothings, and other such frugalities. They won’t go into helping us grow our own food, or put more money in the pockets of working people, nor into the pockets of the average citizen, because that is where the extra VAT is coming from and who it is effecting the hardest.

In other words, it is a political way to rip off the citizens of this island, and, …. get away with it.

Further Reading

Hey folks! You know we don’t like to re-print entire articles from other sources, but with The Nation and The Advocate we have to because they regularly modify and delete stories to suit the changing agendas.

Please go to The Nation to read $1.3b in VAT

… but if it is not there, you can read it here:

Continue reading

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Filed under Barbados, Consumer Issues, Economy

Barbados VAT shortfall: a cultural problem of rule of law?

Barbados Government announces it has hired a consultant! OOOOOOH!!!!

(VAT delinquents must be shaking in their boots!)

Barbados Finance Minister Christopher Sinckler recently held a press conference to announce that the Government of Barbados has failed miserably to collect a staggering $300 million dollars in VAT arrears.

That wasn’t exactly how Sinckler put it though. With typical political bluster he announced that the government was REALLY, REALLY, REALLY going to get tough and enforce laws that are on the books.

This time.

Here’s what the press release said said…

“The hammer could be coming down on those Value Added Tax (VAT) defaulters who have racked up a staggering $300 million in arrears inclusive of penalties and interest.”

And it got better…

“Given this situation, Mr. Sinckler disclosed that a consultant had been hired to review the legislation as it related to collections and enforcement.  He also revealed that the consultant had already submitted the draft amendments which were being reviewed by officials in the Customs and Excise Department.”

My God! A consultant, reviewed the legislation and submitted draft amendments that are being reviewed RIGHT NOW!!!

Wuhloss!!! I’d better pay up that VAT tomorrow.

Or… maybe the next day. 🙂

Frankly, Sinckler sounded an awful lot like the Commissioner of Police warning gangs that if he had the officers and the budget, the gangs would really really really have to worry. And the Commissioner of Police sounded an awful lot like the Minister of the Environment talking foolish saying that the government was going to install hidden cameras all over the island to catch illegal tippers.

A Culture that disregards Rule of Law

Could it be that the problem is that Bajans have been conditioned that laws and rules are generally optional depending upon circumstance and position? Could it be that we’ve learned from the big-ups that laws, if they exist at all, don’t apply to all? That is the way it is on de rock. Anyone can name a dozen situations and stories – most of them true.

And where laws don’t exist (integrity legislation, drunk driving, freedom of information, environmental legislation) they are to be promised at election time but never ever implemented. That is what we have been taught by our political elites and we have learned our lessons well from skilled masters.

“Doan give me such a fright, Minister Sinckler! For a moment I thought you were serious, but then I remembered all the other laws that your government promised to pass.”

Pass me another beer, darlin’. I don’t think we need to hurry off to pay that VAT right this moment! 🙂

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Filed under Barbados, Business & Banking, Crime & Law, Culture & Race Issues, Politics