Basket of goods confusion resolved
The issue that had resulted in confusion among supermarket operators regarding the new basket of goods and what items would now attract 17.5 per cent value added tax (VAT) has been resolved following a meeting yesterday involving Minister of Finance Chris Sinckler, stakeholders and representatives of the Barbados Revenue Authority (BRA).
In his June 15 Financial Statement and Budgetary Proposals Sinckler announced that over 200 items would be removed form the basket of over 400 items, and would therefore attract the 17.5 per cent tax. This took effect on September 1, 2015.
However, last week Barbados TODAY reported that supermarket operators were not clear how to classify some of the items, and they were awaiting word from their suppliers.
But in an interview with Barbados TODAY this evening Sinckler said “a base understanding” of what would be in the basket and what would be out, was reached at yesterday’s meeting.
“We did not agree on every single item but we did agree basically on about 95 per cent of the items, and our view is that it covers for practically every provision in one way or another for the consuming public and clarity was brought for the operators –– stakeholders, supermarket operators and others –– as to what is in and what is not in and how it will be designated. And both sides will now go and make the necessary adjustments,” explained Sinckler.
He said in addition to giving the stakeholders a list of the final schedule, it would be published in a few days’ time. This, he said, should “hopefully bring a close to this matter”.
In an earlier interview Sinckler admitted that the tariff headings were “fairly technical”, adding that there had been some level of confusion in the interpretation.
Saying he understood the technical nature of the changes required, Sinckler said that was why a two-month window was given, in which time operators should have consulted on the matter and make the necessary changes.
“I think the same matters that occurred that caused items that ought not to have been in the basket to get in it, is the same challenge that people are having to take them back out,” he said.
“It is truly a highly technical issue. It really is. Not everybody [readily] understands the tariff headings and how to deal with them. So sometimes things could happen that were unintended,” he said, explaining that while there were specific tariff headings there were some with sub-headings.
“We have also discovered in tariff headings of course, that where there is not a specific designation there is a caption called ‘other’. So you may not be able to define a tariff head so specifically to include everything,” he said.
However, Sinckler said tariff headings were being reviewed and the new and improved ones could be available within a matter of months.
“A lot of that is being driven by the world customs organization. So they are doing that. There is a new tariff heading and we are going to be moving to that,” said Sinckler.
“They are now implementing at BRA and Customs, the ASYCUDA World, which brings us into more modern operations for customs. And new tariff order will be done in the coming months as we get the technical assistance from those global bodies through reforming the tariff [headings]. The goal is to make them a lot more accessible and easy to understand. That is really where that is going,” he added.
The ASYCUDA system is a computerized custom management system which covers most foreign trade procedures.
“With all goodwill and all good cheer we will get it right because the idea is to make sure that the average citizen has all of those things which we believe are important for daily existence,” said Sinckler.