Consumer advocacy group urges targeted VAT relief

The Barbados Consumer Empowerment Network (BCEN) has outlined a series of recommendations it wants the government to implement, including targeted value-added tax (VAT) reductions aimed at providing relief to households struggling with rising prices.

Executive Chairman Maureen Holder on Saturday suggested that the cuts should be on staple foods, medicine, and basic household goods.

“Offset revenue loss by maintaining or increasing VAT on luxury or non-essential imports, pair VAT adjustments with targeted support measures, including cash transfers or utility subsidies, and monitor and adjust policies dynamically to balance relief with fiscal responsibility,” Holder told Barbados TODAY.

“BCEN believes that Barbados can ease the burden on its citizens without undermining fiscal discipline. Some other countries have shown that well-designed VAT policy, even under financial oversight, (Barbados is still under the Barbados Economic Recovery and Transformation (BERT) 3.0) can provide real, tangible relief,” the leading consumer advocate stated.

She contended that the time has therefore come for the economic debate to move beyond theory and deliver solutions that directly improve the lives of Barbadians.

“Research shows,” Holder added, “what efforts were made in the recent past towards cost-of-living relief in Barbados.  BCEN did a comparative chat depicting what was tried versus the type of recommendations that we are making. The recommendations made by BCEN are by no means a panacea but are aimed at providing a targeted, sustainable, and integrated approach that eases the financial burden on households while maintaining fiscal stability.”

She continued: “We did the comparison to show that while past government measures offered some temporary relief, the trouble is, will the government listen? Who will listen to even implement?”

“It is interesting to hear academics argue that cutting VAT will not help Barbados, yet very few are offering alternative solutions to the pressing issue of high living costs facing everyday Barbadians. While VAT is only one piece of a complex economic puzzle, households continue to face inflation, rising utility bills, and ever-increasing prices for food, transport, and essential goods,” Holder said.

“Skepticism about VAT cuts,” the consumer advocacy group chair contended, “may be valid in theory, but without practical measures such as targeted support for low-income families, stronger consumer protections, regulation of monopolistic practices, or investment in local production, criticism alone does little to ease the burden on citizens. Real solutions require action-oriented strategies that balance fiscal responsibility with the urgent need to keep life affordable.”

She argued that Barbados has already tried some measures, including temporary price controls, subsidies on utilities, and minor VAT adjustments on selected items.

Holder said that while these initiatives helped somewhat, they have not kept pace with the rate of inflation and rising living costs, leaving many households vulnerable.

Drawing lessons from international examples, the leading consumer group leader highlighted that countries such as the United Kingdom, Germany, Hungary, Ireland, and India successfully used temporary or targeted VAT cuts on essential goods while maintaining fiscal stability.

“These measures were often combined with direct support for low-income households, ensuring meaningful relief without undermining government revenue,” Holder added.