BRA raises concern that Govt’s Basket of Goods is no longer basic
Frozen spare ribs, tenderloin and sirloin steak, ham shoulders, Pacific salmon, snapper, croaker, grouper and sea trout are among several exotic items that have found their way onto Government’s zero-rated Basket Of Goods, which was originally conceptualized as a means of rendering relief to the island’s poor.
Also exempted from Value Added Tax (VAT) charges of 17.5 per cent are dogfish, sailfish, spearfish –– fresh or chilled for processing –– grated and powdered cheese, blue-veined cheese and virtually all manner of imported nuts, from Brazil nuts to cashew nuts –– with shell and without shell, fresh or dried –– to almonds, hazelnuts, walnuts and fresh pistachios.
The so-called list of basic food items also includes ortiniques, Ugli fruit, strawberries, raspberries, cranberries, mulberries, loganberries, blackberries and the like, as well as “wholly milled” and “semi-milled” rice, cocoa powder, chocolate and malt extract.
Barbados TODAY has obtained a copy of the 400-item zero-rated list, which is currently before the Barbados Revenue Authority (BRA) for review before presentation to Minister of Finance Chris Sinckler. Officials say the recommendations are also expected to inform the upcoming Budget, while noting that as it currently stands the Basket Of Goods is valued at over $80 million in terms of exemptions and over $450 million in terms of annual customs value.
Officials also say the list could easily be slashed in half therefore increasing the Government’s tax take from the VAT by over $40 million and still meet the relief requirements of the poor, with items such as rice, peas, corn, lentils, pumpkin, sweet peppers, celery, asparagus, string beans and other leguminous vegetables, as well as carrots, cabbage, cauliflower, tomatoes, dolphin, minced beef, bread and salt likely to remain unchanged.
Asked to explain the inclusion of non-basic items, officials suggested it might have been a case of Government seeking to aid out vital sectors such as tourism.
However, with tourism now getting concessions under the Tourism Development Act, it is believed this would cushion the impact of any pending changes.
A much more conservative basket of food items was first introduced on October 1, 1997, after the VAT was implemented on January 1 of that year.
At the same time exemptions were offered in terms of educational or scientific literature, recorded on eitherelectronic or printed medium, as well as on construction services for residential houses.
However, the list of exemptions has grown significantly since then, with the International Monetary Fund recently calling for sweeping tax reforms and for the Freundel Stuart administration to rein in its policies on VAT.