The Central Bank of Barbados has announced that small and medium sized enterprises can now receive their Value Added Tax (VAT) returns in a more timely fashion, following the establishment of a special facility.
In a statement today the Bank said effective April 13, it had established a VAT Receivables Liquidity Facility (VRLF), guaranteeing small businesses more prompt refunds of monies owed by the Barbados Revenue Authority (BRA), once they met certain criteria.
Under the new scheme, the Bank will provide a guarantee to financial intermediaries for outstanding VAT returns between $3,000 and $5,000 for any one VAT refund.
The move comes following numerous calls from interest groups, including the Barbados Small Business Association (SBA) for Government to pay them their outstanding returns.
Senior Credit Officer Joycelyn Holdipp said the Central Bank recognized that cash flow was important to the life of any business and small businesses were especially challenged in that area.
“We urge small and medium sized businesses to access the fund. We have therefore made the process for using the scheme as simple as possible,” she said.
“Applicants to the scheme must first be certified by the Small Business Development Unit (SBDU), they must then obtain a certified letter form BRA confirming the amount of the VAT refund. On applying to their financial institution to facilitate payment, they must submit the certificate from the SBDU and certified letter from BRA in order for the returns to be advanced,” she explained.
The Central Bank said that some credit unions, commercial banks and other financial institutions were authorized to facilitate payment under the scheme. To view the details on the list of authorized financial intermediaries, the VRLV and the full suite of financing schemes business operators are asked to visit the Central Bank’s website www.centralbank.org.bb or call 436-6870.