The Senate on Wednesday night passed amendments to the Land Tax Act removing a rebate granted to manufacturers and producers of solar energy.
Introducing the Land Tax (Amendment) Act, 2015, the acting Leader of Government Business, Senator Dr Esther Byer, said the wording of the law had given rise to misinterpretation, which had resulted in individual house owners with solar energy-trapping devices on their roofs applying for the 50 per cent tax rebate.
She explained, however, that the legislation was intended to benefit only manufacturers and exporters of solar equipment.
The amendments, passed without comment from Opposition and independent senators present, removed tax rebates as an incentive package for both individual house owners and manufacturers of such equipment.
Dr Byer explained: “The Minister [of Energy] had indicated that he would be returning to this particular issue of rebates and other incentives for the manufacturing sector. It just would not be written as it is here, which is quite ambiguous in its wording”.
She added: “Government still has its plans for renewable energy and energy efficiency . . . still aims to put Barbados ahead of the rest of Latin America and the Caribbean as the number one country in terms of renewable energy and energy efficiency.”
“There are still incentives in terms of income tax at the individual level,” she emphasized.
The amendments repeal sections 6I and 6J of the Act. In part, Section 6I gives “a company or an individual who manufactures goods in any calendar year for export, the value of which is $100,000 or more, the amount of tax paid by that company or individual would be calculated at 50 per cent of the tax demanded…”
In part, Section 6J states, “Where a company or individual is engaged in the production of solar energy, or the manufacture of goods to be used in the production of solar energy, the amount of tax payable by that company or individual shall be calculated on 50 per cent of the tax demanded…”.
Dr Byer said: “In both of these sections, it actually speaks to the company or individual, and that has led to some misinterpretation”. She added that the misinterpretation had caused the then Commissioner of Inland Revenue to note that because of it, “individuals who installed photovoltaic equipment on their roofs were coming forward to claim this rebate”.
“There are incentives and rebates available under the income tax for those individuals, but this particular section of the Act was inserted so as to incentivize the manufacturing sector to promote the production of these goods… for export,” she explained.
“The advice given at this time is just to repeal those two sections.”