$200m in taxes

Food items, sweet drinks and milk to attract higher duties

Barbadians will soon by paying more for certain food products as a result of Government’s decision to make changes to the so-called basket of basic food items.

Delivering the 2015 Financial Statement and Budgetary Proposals in the House of Assembly this evening, Minister of Finance Chris Sinckler announced that effective September 1, there will be a new and smaller basket of basic food items to which full exemption from the standard VAT rate of 17.5% will be applied.

Minister of Finance Chris Sinckler
Minister of Finance Chris Sinckler

“All other food items in the original [400-item zero-rated] VAT Basket, [which included Frozen spare ribs, tenderloin and sirloin steak, ham shoulders, Pacific salmon, snapper, croaker, grouper and sea trout] will be subject to the standard rate of the VAT of 17.5%,” he said.

In a near four-hour presentation, Sinckler also announced the imposition of a new cess on milk and milk substitutes, along with a new sweet drinks tax, which takes effect from
August 1.

In light of an increasing incidence of Non-Communicable Chronic Diseases (NCDs) which are wreaking havoc on the Barbadian population and contributing to mounting health costs, Sinckler said: “Cabinet has decided that in order to encourage healthier consumption patterns of our people as it relates to the consumption of sweetened beverages such as carbonated soft drinks, juice drinks, sports drinks, fruit
juices and others, particularly those which fall under tariff headings 20.09 and 22.02 on the import side, and similar products of like standing produced within Barbados that contain added high calorie sweeteners, (these) will now attract a 10% excise tax levied on the value of the product before
VAT is applied.”

He added: “This policy, which is expected to generate in excess of $10 million in revenue this fiscal year, will be reviewed in two years’ time to determine how effective it has been in shifting the behaviours of both producers, importers and consumers as whether it should be extended or intensified.”

Cellphone users will also have to pay a new mobile airtime excise tax. In making the announcement, Sinckler revealed that based on information gathered from the Telecommunications Unit of the Division of Energy and Telecommunications, the total minutes used by LIME subscribers last year was approximately 575.9 million compared to 514.5 minutes for Digicel subscribers.

“Therefore, with effect from August 1, 2015, a mobile airtime excise duty on cellular phones will be imposed at a nominal rate of three cents per minute for both service providers LIME and Digicel. On current times, it is expected that this imposition will generate a total of approximately $32.7 million in revenue on an annual basis for the Treasury,” the Minister of Finance said.

Part of the proceeds from the mobile airtime excise duty in the amount of $2,500,000 will go towards the establishment of a scholarships and grants programme. Beneficiaries will be low-income Barbadian students enrolled at the University of the West Indies (UWI) who are in need of financial support, following the introduction of tuition fees from last September.

Altogether, Government is projecting to raise an additional $200 million, in net terms, as a result of the new revenue measures, including $20 million from the removal of VAT exemptions for all betting and gaming services and supplies, effective September 1.


At the same time, Government is proposing to raise the current VAT registration threshold from $80,000 to $200,000, effective January 1, 2016, while lowering a number of the deductions under Section 12 of the Income Tax Act.

He explained: “This would mean that businesses which would have spent $32 million on special funds and were allowed to claim an amount of $48 million representing between 120 and 150% of expenditure will have this refundable rate reduced to 100%,” said Sinckler, while noting that “in this particular case, Government is expected to yield an additional $4 million of tax revenue based on the current applicable corporate tax rate of 25%.”

“This is expected to result in additional income of approximately $15 million using the current tax rate of 25%.

In terms of Personal Income Taxes, Sinckler said, “it is proposed that with effect from Income Tax Year 2015 that only the following deductions will be allowed, along with the existing personal allowances; contributions to trade unions and statutory associations, donations to charities including the church, and energy audit retrofits. Other special credits such as foreign currency earnings allowance and double taxation relief will also remain in keeping with Treaty arrangements.

“In addition and in an effort to ensure that taxpayers are not unduly disadvantaged by these changes, I now propose that the current tax rate of 17.5% will be reduced to 16% and the higher rate of 35% to 33.5%.  This will result in a reduction of approximately 60% of tax refunds being processed and be relatively revenue neutral netting the Government $9 million in additional revenue.

Sinckler went on: “I therefore propose that effective immediately, all those individual professional operators provided for under the Registration Regime of the Profession, Trade, and Business Registration Act, shall be required to produce a valid tax clearance certificate from the BRA in order to renew their respective licenses to practise in this jurisdiction.”

A new structure is also to be introduced for land tax, which would see a residential property owner with a property valued at $150,000 or less, remaining exempt. However, a homeowner with a property valued at $250,000 would now be required to pay $100.00 per annum, an increase of $40; a property valued at $450,000 would now attract a charge of $300, an increase of $40 from $260.00 per annum; a  property valued at $600,000 would now result in a tax of $975.00, up from $760.00; and a property valued at $1,000,000 would now be required to pay an additional $215, moving from $2560 to $2775.

Several user fees are also due to take effect.

The Minister of Finance did not provide all the details. However, he said “during the coming financial year adjustments will be necessary across a number of areas including: agriculture service fees, the Barbados Fire Service fees, Government Day Care Centre fees, Immigration services fees and the general user fees for Corporate Affairs and Registry Services to name a few.

“Overall, a general assessment of all Government user fees will be conducted and adjustments made to create a more efficient system of doing business.  At minimum, these adjustments are expected to generate approximately $6 million in revenue,” Sinckler said.

In addition to its net revenue gain of $200 million, Government is projecting “additional expenditure savings of $30 million from reductions in supplementaries, savings from public sector job attrition, and smaller gains from enterprise reform efforts during the course of this fiscal year”.

These are expected to redound to an end of year fiscal deficit of between 3.5 – 4 per cent of GDP on an accrual basis, which means “a shaving of two percentage points of the projected
deficit in the 2015-2016 Estimates of Revenue and Expenditure of 6% on an accrual basis”, Sinckler said.

13 Responses to $200m in taxes

  1. Maria Leclair
    Maria Leclair June 16, 2015 at 1:09 am

    Talk about taxing up the yin yang…holy smokes!

  2. Frank Fowler
    Frank Fowler June 16, 2015 at 1:17 am

    Should tax some lawyers and see how far that goes

  3. Veroniva Boyce
    Veroniva Boyce June 16, 2015 at 4:24 am

    Finance he stomach have NOT done anything beneficial in the budget for the citizens of Barbados whatsoever. He hasn’t mention, Health, Pensions, Transport, Agriculture subsidises, duty on alcohol i.e spirits, beer & cigarettes, petrol, housing, unemployment benefit, the additional increase in taxes, is that going to help reduce the debt? All land and property owners should be paying land taxes. Training or work experience for youth when leaving school, what measures are there put in place for companies for the growth of the economy to reduce unemployment? No mention of the tax return refunds. There is NO substance in the budget. He has all intentions of tightening the citizens belts until their stomachs touch their backs. Absolutely ridiculous! Just hope he don’t slap on tax for picking a few grapes, dunks & ackees.

  4. Rawle Spooner
    Rawle Spooner June 16, 2015 at 5:11 am

    Why do politicians all over the world think by imposing taxes on its citizens it can solve all problems that were cause by politicians in the first place it has never work and this time around it will not, because these said politicians gine take revenue generated from these additional taxes and just blow it on stupid stuff.

    • Simone Gibbons
      Simone Gibbons June 16, 2015 at 5:49 am

      I like this comment because it isn’t directed at one particular party but all of them. Regardless of who’s in power, at the end of it all, they will do what benefits them, whether it’s BLP, DLP, NDP or whatever other P we had/have/will have.

  5. Alex Alleyne June 16, 2015 at 6:08 am

    Paying through our teeth in TAXES. We are TAX loaded up to our eye balls .

  6. Patrick Blackman June 16, 2015 at 9:36 am

    Let me be the first to congratulate you Mr. Minister on an excellent budget (given the current economy). Some of you may call me a yardfowl or what ever (I support neither party) and it doesn’t matter. The finance minister did the right thing at the expense of him being not re-elected.

    Government has to raise revenue to run a country and as citizens of this country you have to pay your fair share of taxes. I didn’t hear you complaining when the BRA disclosed that individuals and businesses owed over 400M+ in outstanding taxes (no comment from the Barbados Private Sector Association). Why didn’t you not come out and demand that these taxes be paid but now you want to kill the messenger.

    How many of you citizens earn income that is unreported? I don’t see you running up to the BRA to disclose it and pay what is due but you sit back and wait on the government to help you. Look at all the money you spend on cellphones and partying and then you tell us “things hard”. Nearly every school child has a cellphone which is very expensive, don’t we have our priorities wrong?

    What has the tourism industry done for this country? Yes,you bring in foreign exchange but that doesn’t give you the right to be parasites on the government for every aspect of your business. This government and previous governments have pandered to your wishes when most of you run inefficient operations and most of your business need to be shutdown. Stop this level of mendicancy and run your businesses as a real business and not as some 2×2 shop.

    The banks and credit unions are just as guilty, tell us what have been your efforts towards turning this economy around? You make it extremely difficult for a poor man to get any type of loan to start a business or even for personal development because your approach is strictly to be risk aversed. The credit unions have 200M+ in deposits just sitting there doing nothing, when do they intend to be creative and put that money to work in the economy? They are all the same parasites.

  7. jeremy walcott June 16, 2015 at 11:10 am

    What I fail to understand is…how these people could cut jobs all over…to then raise taxes left right and center…poor ppl aint supposed to eat anymore….making it harder for young people and then wanna know why we so lawless…ever study how hard it is for a young person to get their own house land and car im these times……but politicians living good and taxing everythimg…I waiting for the sidewalk tax……funny thing is the big companies does pass on the taxes to the consumers….so they aint feeling it

  8. jrsmith June 16, 2015 at 11:35 am

    @,Patrick,B, again on the button, bajans never thought the time would come ,when , they start paying they way in the world . next stop the I don’t care attitude. Bajans never complain, funding a $300,000.00 few hours trip , for a Mr benny hinn to bring his American praying for Barbados. A big lot of good that did.

  9. Patrick Blackman June 16, 2015 at 11:45 am

    @jeremy walcott – you cannot keep people emplyed if you cannot generate the revenue to pay them. Money has to come from somewhere to run the country. If these people would pay the 400M+ government would have the money to provide jobs.

    Walk around the place and you would see how these “poor young people” have the latest phones, clothes etc. going to all the reggae shows etc., they have their priorities wrong.

    Because you are poor doesn’t mean you must yrjrob and shoot people, go back to school, learn a trade to make yourself employable and stop blaming the government for your own personal failings as a responsible individual.

  10. Kevin June 16, 2015 at 2:09 pm

    We really throw about that word ‘poor’ to often and its losing its effectiveness. A guy on a call-in program said the ‘poor’ people cant afford to put gas in their vehicles anymore. Psftt, as far as I know poor people don’t own vehicles, they catch the bus. And some days they don’t even have the busfare to catch the bus. That is poor.

  11. Alex3 June 17, 2015 at 1:01 am

    Reading the list I am amazed that the favourite targets of governments in Canada when times are tougher are not included in the list.
    The so called “Sin Taxes” on tobacco products and alcohol come to the fore with regularity in this country.
    Given what faces Barbadians, maybe more in that area would help the government meet its obligations while at the same time cutting down on harmful consumption.

  12. Alex3 June 17, 2015 at 1:10 am

    I also wonder if Mr. Sinclair and Mr. Stuart make any connection to enforced poverty and crime.
    As people get more desperate crime in terms of robbery and assualt will increase. Domestic violence will increase.
    If this happens more than we are seeing now, how long will Barbados be able to avoid being branded as an unsafe destination?


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