For the second time in two years, shoppers will enjoy a boost to their spending power as Government declares Wednesday, a VAT-free day.
The announcement was made on Monday afternoon by Minister of State in the Ministry of Finance and Economic Affairs, Ryan Straughn who confirmed that the 17.5 per cent Value-added Tax (VAT) on goods would be zero-rated, four days before Christmas.
However, unlike last year when business owners complained that they had not been consulted by Government and as a result were not in a position to modify their payment systems to allow for the VAT removal at the last minute, Straughn said both the Barbados Chamber of Commerce and Industry (BCCI) and the Barbados Private Sector Association (BPSA) had been involved in the discussions this time around.
During a press conference at Government House, Straughn estimated that the exercise would cost Government between $3 to $3.5 million in revenue.
“The Government of Barbados has agreed that Wednesday, December 21, 2022, shall be a VAT holiday in Barbados. As was the case last year, the objective is to provide a welcomed ease for consumers which is obviously on top of what has happened already for the year and we feel that the timing is right with respect to being able to do this in a significant way,” Straughn said.
“Having faced about 33 months of significant, economic challenges; COVID, the ashfall, Hurricane Elsa, the war on Ukraine, we believe that at this Yuletide season consumers will certainly benefit from the 17.5 per cent reduction in prices on the goods that attract VAT on the day and therefore, will be able to stretch their budgets even further than previously anticipated.
“We did consult with the BPSA as well as the BCCI who cover most of the retail entities in Barbados to advise them that we were embarking on this particular initiative. I think learning from last year it would be much easier for them to be able to change the systems…and between tonight and tomorrow to be able to ready their systems with respect to having the prices adjusted on the day.”
He urged businesses that had sales which were set to end on Tuesday, to extend those sales through Wednesday.
“This is something that came up last year and for sales that end tomorrow [Tuesday] I can only urge persons to please just allow them to continue on Wednesday if you are so minded. Because whilst I cannot tell you what to price your goods at, last year there were some questions with regards to customers going into the store and seeing a different price, but on very close inspection the sales were coming to an end the day before,” Straughn said.
The minister said only goods were eligible, and those goods had to be available for sale with immediate issuance or delivery to the customer on the day. He said orders for goods that were not in stock do not qualify.
Straughn said while hire purchase sales were eligible, credit purchases, goods on consignment or from wholesale distribution centres were not eligible.
Additionally, he said motor vehicles, gasoline, LPG and diesel, guns, ammunition, cigarettes and alcoholic beverages were exempt from the VAT ease.