It was first announced by Minister of Finance Chris Sinckler in his June 2015 Budget as one of the measures to be used by Government to get Barbadians to lower their caloric intake.
However, the Minister reported today that more than one year after the ten per cent excise tax on sweetened beverages took effect on August 1 last year, there had been no noticeable change in the consumption habits of Barbadians.
And while this has come as no surprise to him, Sinckler has acknowledged that the controversial tax – which had been met with grumbles among the citizenry when it was first applied to sweetened beverages, including carbonated soft drinks, juice drinks, sport drinks and fruit juices with sweeteners – has not served as a deterrent to domestic consumers.
“We haven’t seen a dramatic decline in the use of sweetened beverages yet, but it comes with time,” he told reporters on the sidelines of a visit to primary schools in his St Michael North West constituency where he was making back to school donations.
“We didn’t expect that we would see that in the first year. It is going to take some time,” he stressed.
Earlier investigations by Barbados TODAY had revealed that at the end of the first six months only $2 million of the expected $10 million in annual earnings had actually been collected by the Treasury.
When asked today about the financial intake from the levy, Sinckler could not immediately say how much money has been collected to date. However, he acknowledged that even though the tax collection process was going smoothly, “the levy has been running just below [target] in terms of the collections”.
“We have not had any major complaints and the resources have been coming in,” he said.
Today, Sinckler also updated reporters on the performance of another contentious measure which was also announced in last year’s Budget presentation — that being a mobile airtime excise duty on cellular phones, which was initially to be imposed at a rate of BDS$0.03 per minute effective August 1 that year.
However, in November 2015, Sinckler told Parliament the plan was proving too difficult and expensive for the telecommunications companies to implement.
He therefore went on to announce a 4.5 per cent increase in the Value Added Tax (VAT) levied on cell phone service, which took effect January 1, 2016, raising the tax from 17.5 to 22 per cent.
Today, Sinckler could not say exactly how much has been collected to date, but said the phone levy, which was expected to raise between $15 and $16 million, was going “pretty well”.
“So far it has been very close to target, if not on top of the target. Of course we are only through the first nine months of the year so we have to see it how it runs for the rest of the calendar year and then moving on from there at the end of the fiscal year next year, but so far it has been doing well from all reports,” he told reporters of the tax, which has not negatively affected domestic phone use.