As the Government seeks to implement Value Added Tax (VAT) on online transactions, a key small business representative has urged authorities to carefully consider its likely effect on entrepreneurs.
President of the Small Business Association (SBA) Wayne Willock told reporters Wednesday that numerous delays and implementation challenges facing the so-called Amazon Tax have spared scores of small businesses from a cumbersome levy.
But Willock declared that numerous businesses are still bracing for whenever the 17.5 per cent tax is eventually instituted.
He said: “Whenever they manage to get it implemented it will definitely have an impact because we are already paying a forex fee on transactions which is currently making a fair amount of money for the Government.
“The VAT online tax would present some serious challenges for people who have to purchase stuff overseas.”
Willock continued: “From my understanding, there are many challenges in the implementation of the online VAT, so as much as there is talk about it, there are serious challenges about how it will be collected and how do you ensure it reaches the coffers of Government here and the technology involved.
“Some [overseas] suppliers are not really interested in collecting VAT for any other country so there are some challenges.”
Earlier this year, the tax became a bone of contention for some who argued the measure would destroy fledgling businesses which rely heavily on online purchase for stock. Other more established firms supported the measures indicating it would level the playing field and stamp out tax evasion.
As the Government seeks a viable way to institute the measure, the small business advocate is imploring policymakers to find a way to ease the burden.
Willock said: “I am not sure when it will come on stream, but I can see that we will have some issues unless they decide to relax the current fee. To have both running together would be a serious challenge.
“What should be noted is that if you are purchasing something to be used outside of Barbados, that VAT does not apply.
“It’s only for items used within the Barbados territory. So I suppose we will have to look for other ways to do things. Up to now, it has not been implemented. We are anticipating how it will go.”
The SBA head acknowledged Government’s initiative ought not to be stamped out altogether as Government was losing millions in taxes annually, but argued it should be either at a reduced or accompanied by the removal of some other taxes.
