Government is hoping to spread a little Christmas cheer by giving Barbadians a “VAT holiday” this Monday.
Minister in the Ministry of Finance, Ryan Straughn made the announcement Saturday evening that on Monday, December 20, consumers will be exempt from paying the legislated 17.5 per cent value added tax on goods and higher purchase sales.
The measure he said was to provide some ease for shoppers who have been financially challenged over the past few years and allow them to stretch their budgets.
Straughn went on to detail the goods that are eligible for the VAT concession. These are: goods available for sale with immediate issuance or delivery to the consumer on the day, and higher purchase sales are eligible.
Those that do not qualify are: goods that are not in stock; credit purchases or goods on consignment; motor vehicles, guns, ammunition, cigarettes and alcoholic beverages; and the supply of accommodation.
The minister advised that companies or businesses are expected to file their VAT returns as usual but instead record zero-rated supplies for that day. He explained this meant that the business would enter on the VAT returns as zero-rated sales in line 105. Straughn said this would allow the Barbados Revenue Authority (BRA) to track the number of sales and VAT forgone for that day, ensuring a risk-based approach for auditing purposes.
He added: “In filing the VAT, a company must provide sales data or receipt specifically for the VAT holiday. Companies will have to issue a tax invoice to the customer with the value added tax recorded at zero per cent. As the supply is zero-rated, the recovery of input tax is permitted as the business would be allowed to recover the VAT initially paid on the items.”
Straughn maintained that the VAT holiday will represent what he considered to be a “win-win” situation for both the consumers and businesses.
“Given the circumstances that we have been experiencing over the past 21 months, certainly I wish that we could do more but regrettably we still have unpaid bills to be able to settle and the extent to which we have been able to continue to provide for other matters in relation to the pandemic,” he said. (KC)
