With two deadlines already missed, Government announced today that it is finally ready to roll out its plan to collect Value Added Tax (VAT) on foreign online transactions by mid-next month. This afternoon Prime Minister Mia Mottley announced that the mechanism for the tax collection is now in place and Government was targeting its introduction by December 15.
Delivering a Ministerial Statement in the House of Assembly today, Mottley explained that the necessary amendments to legislation will be brought to Parliament shortly.
“We will now target a December 15 start as we have completed the procurement of the entity to provide the services to the Barbados Revenue Authority, but the relevant legislative amendment for delegation to the entity collecting the tax will be introduced very shortly into Parliament,” the Prime Minister revealed.
It was during her Mini-Budget back in June that Mottley announced plans to charge VAT on foreign online purchases commencing October 1, 2018. That start date was later shifted to December 1. In explaining the delay, Mottley revealed that Government was held up by the technology. She also explained that this was necessary to prevent the possibility of double taxation.
“We had earlier announced that all taxes that are due on a transaction will be automatically levied if that transaction is carried out on-line using new technologies we have been testing. The taxes paid will be automatically recorded in your receipt and there will be no double taxation at the port once you can show a receipt that taxes have been paid online,” she said.
Mottley also told the Lower Chamber that Government had made headway in its previously announced mission to collect taxes from the betting and gaming industry. She explained that this sector was given certain commitments from the Freundel Stuart administration but her Cabinet was now close to better regularizing the sector.
“We will be introducing a new regime for the betting and gaming sector that has not paid taxes for years as a result of commitments given by the previous Government to them. We are close to resolving this issue with this sector,” Mottley stressed.
When the measure was first announced then Chairman of the Barbados Private Sector Association (BPSA) Charles Herbert, expressed some concern regarding Government’s mechanism for collecting this tax.
“The introduction of VAT on online purchases caught us by surprise. That was one that was not well discussed within the team. For me I don’t quite understand how it is going to work,” Herbert told a joint Barbados Chamber of Commerce and Industry (BCCI) and PricewaterhouseCoopers (PwC) post Budget breakfast seminar at the Hilton Barbados Resort back in June.