Months after the Barbados Revenue Authority (BRA) enforced the Value Added Tax (VAT) on complimentary show tickets, one of the island’s most popular party promoters is expressing frustration, saying the measure could result in a drastic fall off in sponsorship.
The popular show organizer, who did not want to be identified because of “fear of victimization”, told Barbados TODAY that the VAT on complimentary party tickets was really hurting business and could force many players in the industry to host less shows. In fact, he said the implications were far-reaching, pointing out that promoters could also be forced to cut the number of complimentary tickets they gave, which could result in reduced support from sponsors.
Minister of Finance Chris Sinckler has quickly shot down those claims, saying that the Barbados Revenue Authority (BRA) and Government were simply doing their job. Following the concerns expressed late last year when the BRA decided to enforce the 17.5 per cent VAT on complimentary tickets, Sinckler pointed out that the policy was by no means new.
He accused some promoters and corporate sponsors of “major abuse” of the VAT system over the years, warning that Government would no longer afford them any free passes. He said some promoters had abused the system to the point where tax avoidance had become “quite widespread”.
“The BRA is trying to collect the taxes that is due to the Government of Barbados and people must understand that. We are developing very slowly, or very quickly depending on how you look at it, a culture where people believe that they should not be paying taxes and they should have events and put on shows and sell things and not pay taxes.”
He added: “Then some of them . . . who believe that they shouldn’t have to pay, will make noise when they can’t go to the Queen Elizabeth Hospital and get service, and they can’t get drugs. If we want to afford these things, everybody has to contribute. All that the BRA is doing is enforcing the law.”
However, the party promoter told Barbados TODAY that the number of complimentary tickets a promoter gave to sponsors and other stakeholders could range from anywhere between 40 and 200 or more, depending on the size of the event and the amount of sponsorship.
“What we can’t understand as promoters is why are you giving tax on something that is free,” he said.
“It is frustrating because before you didn’t have to calculate that into your cost. Now it works out as a cost,” the promoter said.
Due to the tax on those tickets, he said promoters were now finding it difficult to make a profit given their already high overhead costs, which included rent, security, payments to DJs, COSCAP, advertising and promotion, as well as rental of some equipment.
“Now there is no such thing as a ‘free’ complimentary ticket. When you are doing a sponsoring agreement to appeal to the sponsors, they are expecting something in return besides the mileage. So as part of the packages, you give them complimentary passes or tickets, but really and truly it comes to a cost for the promoters . . . so we are losing money,” he said, adding that they had to pay to print the tickets.
“The complimentariess work like a barter system too if you can’t afford to pay the person for their service, what you might do is give them complimentaries depending on the value. But at the end of the day, it is a cost you don’t budget for because you can’t control the number,” he said.
The promoter suggested amendments to the Cultural Industries Bill to allow promoters to get some “concessions” in other areas when they host shows.
“They need to put concessions on some things that we have to bring in and on other things too, which are associated costs,” he said.
“If Government is trying to push people into entrepreneurship, with all these additional costs it deters you.”
He said although some promoters were concerned and others were frustrated, they were not taking the lead in lobbying the Government to remove the tax from the complimentary tickets because they did not want to be victimized.
“Privately a lot of the promoters are complaining about it, but nobody is getting together as yet to try to lobby about it. You hear different people on social media and all of that but not as one grouping or entity . . . you don’t want the victimization with it,” he said.
The show promoter said people might end up “trying to find different ways to get around it” if they saw no resolution in sight. He said sponsors were already cutting back in what they were giving and this could create a further blow to promoters.
“They are looking for something in return in terms of value for their money,” he said. “So it is even tougher with the sponsorship in this market now. So you have to come really good in terms of what returns they could get . . . and without them, basically the event can’t come off.”