’Sales tax instead of online VAT’, urges Drakes

Describing the Value Added Tax (VAT) as “regressive”, Opposition Senator Crystal Drakes has suggested that a sales tax on online transactions would be more appropriate.

And citing a difficulty in the effective collection of VAT when the supplier is not located in the jurisdiction of taxation, Drakes said it would be much simpler for a sales tax to be applied.

Drakes was speaking during debate in Senate this afternoon on the Value Added Tax Amendment Bill 2019, which would empower the Revenue Authority to collect VAT on online purchases from overseas vendors.

She told fellow lawmakers in the Upper Chamber: “Even in the EU where they have an economic union, they have difficulties working out these taxation measures, particularly for online services.

“So I ask the question again, would it not just be easier to call this a sales tax for administrative purposes, rather than try to tie us in to foreign vendors who now have to register in Barbados? What is that registration process like? And the other issue you have is if that process is not seamless enough, they may just opt not to service the jurisdiction.”

The senator called for more discussion as on how the measure is to be implemented.

She said she was still unsure how individuals would go about getting tax refunds.

Senator Drakes said: “How as a consumer when I ask for a refund but I am not VAT registered, how does that work? I really need someone to flesh out the procedure and the operations of this because I am sure that I am not the only one who is very confused and concerned about this particular measure and the fact that it has the inflationary effect on goods and services, I am hoping that someone on the Government’s side will flesh this out a bit more.”

She also raised a concern that the measure was announced in June 2018 and was supposed to start on October 1, but was then pushed back to December 15.

The Opposition senator said the delays indicated how complex the measure is.

Senator Drakes told fellow lawmakers: “We are now in March 2019 and I can only assume from the outside that there is so much back end work to be done that you couldn’t get it operationalised on October 1.

“So even establishing this clearly is a complicated process, complex enough that there were two dates that were missed and the public of Barbados, including myself as the average citizen who uses a lot of online services, would like the Government to have a little more discourse on this matter because there are a lot of questions regarding it”