Households to get tax-free generators, installation – Straughn

Households will from next week be able to import generators free of import duty and VAT, Minister in the Ministry of Finance Ryan Straughn has announced, declaring the waiver a hurricane preparedness initiative.

The waiver extends to purchases through generator dealers and online suppliers, once proof is established that the imported dynamo is for home use only.

The move makes good on Prime Minister Mottley’s Budget Speech vow to introduce the tax-free policy.

Straughn told reporters at a briefing on Friday that fees for installing the generators will also be tax-free. This, he said, is similar to the government’s waiver on water tanks, septic tanks and electric pumps.

“One of the key things that happens in a traumatic event, especially hurricanes, is that immediately in the aftermath, there is a significant power outage, and therefore the focus of our risk reduction programme is to ensure that within our communities, we can provide some measure of security and safety, because once there is light and appropriate generating capacity there is some level of comfort and safety,” the finance minister said.

Some 3 406 generators have recently been imported, Straughn said. Addressing concerns over the potential abuse of the waivers, he stressed that the policy is intended strictly for home use and not for commercial purposes.

“We’ve observed that there are a number of anomalies whereby some have taken advantage of the process and therefore we’ve had to put a few measures in place to be able to ensure that households who legitimately want to have access to generators can continue to do so under the policy that’s been rearticulated,” he said.

“It’s important to understand that as government is foregoing revenue as government in relation to this specific exercise, it’s important that households actually benefit from the reduction in costs and to understand that most businesses would have some type of business continuity in place and therefore the programme here is not designed for businesses.”

Following talks with Customs, the minister noted that the exemption is applicable to generators ranging from five to 25 kilowatts, which he said is suitable to power an average household.

“The customs department will be working with importers and suppliers to ensure that generators are made available within that specific range,” he said. “This system will ensure that persons do not pay duty or VAT, once the person is able to attest that it will be installed at their house. Those homes requiring above the limit may apply to the Ministry of Finance to receive the waiver, once they are able to verify their residential purpose, he added.

The waiver also extends to online purchases, based on certification that the generator will be installed at the buyer’s residence, said the finance minister.

“We are satisfied that over 3 400 generators have been imported but moving forward we want to ensure that this is done in more order in relation to people taking advantage of the offer and that the policy intent is met,” he said, as he encouraged householders to secure their water tanks, electric pumps and generators under the tax waiver scheme.

It was not immediately clear how the move to import fossil fuel-burning generators would fit into the government’s 2030 carbon-neutral strategy or whether solar-powered generation and storage systems would also qualify for the waiver.

shannamoore@barbadostoday.bb