‘Teething issues’ as ‘Amazon tax’ further delayed

Online shoppers may yet have “another two or three months” before they have to pay VAT on their purchases – dubbed the Amazon Tax – as Government works to overcome a year of delays and difficulties in implementing the measure.

The tax plan, which was announced in the June 2018 Budget, was to begin that October but was shifted two months later to December 1 and then to December 15.

This year, after legislation was introduced to allow the Barbados Revenue Authority (BRA) to outsource tax-collecting powers to an online third party, the measure was to be introduced by July 1. Government had reported that it had procured the tax collection services.

But a month later, online shoppers are yet to see the 17.5 per cent VAT charge on their online purchase receipts.

Asked about the ‘Amazon tax’ on Friday during its latest economic review and outlook, Governor of the Central Bank Cleviston Haynes confirmed  some “teething issues” had further delayed the plan to rake in millions in revenue.

He told journalists: “My understanding is that there are still some teething issues in relation to the online tax, which they are trying to resolve.

“And they envisage that this should be resolved in the next two or three months. Therefore the implementation of the tax has been delayed.”

“The tax itself, it is a broader issue which it seeks to address; not only spending by Barbadians but also spending by non-residents into Barbados.

“I think those are some of the issues which we are trying to resolve at this point.”

Opposition Senator Crystal Drakes had poured cold water on Government’s online VAT plans, insisting that a simple sales tax on online shopping would be more appropriate.

She had also pointed to the difficulty associated with the effective collection of VAT when the supplier was not located in the jurisdiction of taxation.