Minister of Finance Chris Sinckler is strongly rebuking businesses that pass the recently introduced National Social Responsibility Levy on to their customers.
The Barbados Revenue Authority (BRA) last week issued a statement indicating that it had been receiving reports that “some retailers have been adding a tax to customer purchases at the cash register” and attributing it to the levy, which took effect on September 1.
The BRA warned that the “practise is inaccurate and quite frankly illegal” and advised retailers against applying the tax at points of sale.
Speaking to reporters Monday following the launch of the St Michael Battle of the West Primary Schools Quiz Competition, Sinckler admitted that some businesses were likely applying the tax out of ignorance.
However, he expressed concern that some companies were wantonly disregarding the guidelines for its application.
“We have always indicated up front when we delivered the Budget that the National Social Responsibility Levy is not a sales tax. So, therefore, nobody should be putting it on an invoice and anybody who does that either does not know or knows and is doing it deliberately,” Sinckler said.
“I was surprised when I heard itand I believe the President of the Chamber of Commerce also expressed surprise, even though he himself had not seen it.
“It is not a sales tax. It is applied for example, if you import an item, you pay excise tax, duties and other items, you don’t see that when you go into the store and get you bill from the cashier. So why should you see the levy which is imposed at the same time? I don’t see why people should have had challenges with that,” the minister stressed.
However, it was not immediately clear what redress was available to consumers who had already paid the tax at the counter, with Sinckler advising that BRA, along with the business sector, would determine the best course of action.
“I believe that Barbados Revenue Authority has already put out a statement in relation to that and we would be speaking with the Barbados Chamber of Commerce [and Industry] and other partners to indicate to their members and generally that it ought not to be. The only thing that should appear on an invoice is VAT and nothing else. That is the law,” Sinckler insisted.
The levy has caused much consternation among manufacturers, who recently demanded an immediate review on the grounds that there were still too many ambiguities.
During his August 2016 Financial Statement and Budgetary Proposals, Sinckler had explained that the new tax was to be applied on the customs value of all imports, with the exception of goods for the manufacturing, agriculture and tourism sectors.
However, while retailers and economists said it would result in price increases, some manufacturers openly complained that even though they were exempted from paying the tax on imported raw materials, locally produced products would still attract the levy.
This, they argued, amounted to a disincentive for using local products in their production, a point that was forcefully made during a heated meeting at the headquarters of the Barbados Investment and Development Corporation on Harbour Road last month at which BRA officials were bombarded with questions.
During that meeting, Chief Executive Officer of Robert’s Manufacturing Jason Sombrana had beseeched Government not adopt a heavy handed approach to entities not yet in full compliance with the tax, while arguing that the ambiguities of the levy had left many on an unsure footing.
Without going into details, Sinckler Monday expressed confidence that all concerns raised by the manufactures had been addressed.
“Of course you never have a 100 per cent compliance or people understanding and appreciating everything, but where issues arise we will address them,” he said.