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22 per cent VAT

New plan for collecting phone tax

Government is going ahead with its plan to impose a new tax on cell phone use, but via a different route.

Minister of Finance Chris Sinckler has proposed a 4.5 per cent rise in the Value Added Tax (VAT) on cell phone service, to take effect from January 1, 2016, raising the tax from 17.5 per cent to 22 per cent.

Sinckler, who made the proposal to Parliament at the end of last night’s sitting, admitted it would result in higher bills.

However, he told Barbados TODAY Government’s initial plan for a three cent tax on mobile airtime made during this year’s Budget presentation was proving too difficult and expensive for the telecommunications companies to implement.

“Subsequently, at the request of cell phone companies and others, we met with them to look at that excise. [During the meeting] it was felt that given the way in which the billing structure for the companies is done, it would mean an additional cost to them to do a new billing system to accommodate the new excise at three cents.

“They also indicated that they would prefer if it were a percentage, rather than a real figure. It was recommended that the easiest and cleanest way to do this would be to do an increase on the VAT, because VAT is already charged on those services,” Sinckler said in an interview this afternoon at the St Leonard’s Boys School where he was attending the final of the St Michael’s Battle of the West Primary School Quiz.

He said the additional tax would raise between $15 and $16 million, but the original plan would have cost Barbadians twice as much.

“People would be happy to note though, because I know that this was going to be a concern that would be raised, that you would have been paying more if we had used the proposal presented in the Budget,” Sinckler explained.

The Minister of Finance disclosed that when the numbers were tallied, it was discovered that some of the losses could be recouped “elsewhere” without having to make any major changes.

“So instead of raising $32 million . . . we will get about $15 to $16 million. It’s about half of the amount and it’s actually less burdensome than it would have been if it were from the original proposal.”

Sinckler argued that the change should come as no surprise to Barbadians because “while it means people will have higher phone bills”, they should have been expecting it from even before with the Budgetary proposals. He added that phone users would determine how much they pay in VAT by the amount of time they spent on the phone.

“It will be of less impact now given what we are doing, but at the end of the day it is discretionary. How much you use your phone is up to you.”

Sinckler announced during his Budget presentation in June that a mobile airtime excise duty on cellular phones would be imposed at a rate of BDS$0.03 (US$0.15) per minute and would take effect from August 1.

With information gathered from the Telecommunications Unit showing that LIME (now FLOW) subscribers used 575.9 million minutes last year and Digicel customers used 514.5 for the same period, Sinckler said the new measure would have generated $32.7 million for the treasury annually.

The telecommunication companies were to collect the tax and pay the funds to the Barbados Revenue Authority (BRA).

23 Responses to 22 per cent VAT

  1. Michelle Stephens
    Michelle Stephens November 26, 2015 at 3:06 am

    he trying to send this country back to caveman days?

  2. Thomas Katt
    Thomas Katt November 26, 2015 at 3:11 am

    Minister of Tax at it again. He’s going to tax Bajans to death. Death Legally People

  3. Francis McClean
    Francis McClean November 26, 2015 at 3:28 am

    Wow. Save your money folks. Cut back like he said, how much you talk is how much you spend. Buy the necessities only, food etc. it’s the only way out.

  4. Cat Rock
    Cat Rock November 26, 2015 at 3:37 am


  5. Sharon Woolley
    Sharon Woolley November 26, 2015 at 3:46 am

    I doubt he has any friends to call, so it wont affect him

    • bajanguyster December 2, 2015 at 12:11 am

      we pay his phone bill with tax ,something got to be wrong with this man and government for real

  6. Tony Webster November 26, 2015 at 4:56 am

    Hey…think positive peoples…we can still breathe in, for free…and wow…even breathing back out…is also for FREE!
    Crapping….in BARBADOS…is also FREEEEEE. Sex…free also!
    Breaking wind…FREE.


    PRAYING…to be rid of these incompetents…ALSO FREEEEEE
    You prayed yet this mornin’?

  7. dwayne jordan November 26, 2015 at 5:46 am

    No Mr.Sinckler instead of 4%, take it higer to 30%, 16mil is to little a grab, nothing less than 50 mil I dare say. Digicel and he really think I can’t go back to just landline and phonebooth ya lie.

  8. john November 26, 2015 at 6:27 am

    2 incoming land line calls 4 outgoing digi to digi calls under 4minutes each and your $10 top up just ended, taxing a country out of recession is madness, people would not want to invest in a country that is doing that and then the people in the country buy only what they need to survive then bills are too high stealing turns into the norm, I would like BAJANS to have some Unity against things like this and not only come together against “LIME”.

    Now the solution, lower import taxes and VAT and GAS and take a hint from Amsterdam and LA. Alot of people won’t die from cancer.

  9. Chris Murphy November 26, 2015 at 7:15 am

    These measures are simply stupid and very simple minded in thinking. This tax does not mean you will generate the projected revenue, it just means that people will use their cell phone less. Same as when you raised vat on food. People just bought less. If a person’s budget only allows them to spend $300 per month that is all they can spend, these measures will only make sure that they get less for their money not that your revenue will increase by any large amount. Seems like your economic strategy is to make the poor suffer.

  10. Kamilia Boyce November 26, 2015 at 7:43 am

    They keep saying that they are going to be pushing the self employed and that we are going to get out of this recession on the backs of those who are going to be entrepreneurs -small business owners or self-employed but ……is he aware that a lot of them use cell phones, that you cant prevent a customer who is calling from a landline from calling simply because you need the money….does he know that half of them cant even pay there phone bills as is evident when you call numbers from the yellow pages……WHAT IS THIS COUNTRY DOING!!!!!!

  11. 3rdsun November 26, 2015 at 7:50 am

    How will this differentiate between pre (card) and post (bill) service.
    Also the Minister said that the current rate of 17.5% was to be reverted to 15% in the new year.
    Will the phone tax still be 17.5% plus 4.5%?

  12. Meakai November 26, 2015 at 11:03 am

    Since 2008 the DLP has been trying to extort money from the cell phone business. Bajans love for talking is seen as a gold mine for those with access to the data. If in the unlikely event that Bajans do less talking on their cell phones, other plans will be put in placed to make up for the shortfall.

    I am willing to bet that Internet access will be next in the cross-hairs of the Ministry of Finance. Note I did not say Minister. If successful, this will be the policy going forward, regardless of party.

  13. jrsmith November 26, 2015 at 4:36 pm

    People ,people , the Barbados government ,don’t own the telecoms businesses, I said this would come, along with the cartel, and was blasted for talking rubbish. If the minister impose more taxes on us be more sensible , using your mobiles. we should be in the position, to say to the government , open the telecoms market, inviting at least 2-3 smaller companies , giving the cartel some competition.

    That’s why ,I always say, Barbados should never, accept , the same kind of deals , which is in use in the region.

  14. Winslow Brome November 26, 2015 at 5:45 pm

    People already struggling and “they” dont care.The return of Rome.!!!

  15. Rickie Nurse November 26, 2015 at 7:16 pm

    This government nor Chris Sinckler will never learn that overtaxation is not the key to raising revenue Or is it the way to get out of any recession or depth.
    It has never ever in the history of mankind been a tried and proven way of success for any society, be it the Westminister system of government, the Democratic Republican style of the Americans, the communism style of the Russians and Eastern block countries of Europe, or the Monarchial ways of the past Empires.
    It has never work successfully. It has always led to some kind of revolutionary methods being taken, but not necessarily war.
    I don’t think I need to remind anyone of the broken promises by this administration when it comes to VAT, from 08 it was promised that the increased measure was only for a two year period, yet instead of reverting to the previous rate it has since been increased twice, along with additional taxes, most outstanding of all the Solid Waste Municipal tax, a.k.a (the jobby tax).
    This tax was long in coming from the time this administration assumed office. You can rest assured that further increases will come along this very line before 2018, if by God’s mercy we are not freed from them.

  16. Sandra B November 26, 2015 at 9:49 pm

    You know this I why I would never support any political party. I will go to the polls but I will vote for who I thing deserves a chance to prove their worth. Mr Sinckler, I have some news for you, Barbadians are not idiots. Where would it end? I cannot wait for election I would vote for the dog if he is running before I vote for any member of the DLP. Enough is enough. I just can’t wait to see what the next tax would be. I have news for you people there will be another tax increase somewhere. This Government are like whores, would do anything to get money. People rest assure before they leave office we will get an increase in VAT on everything else.

    It is evident that none of their measures are working if they have to keep attacking the people of this island. I have been talking about fight against abuse. This Government has been constantly abusing us from the time they came into office. It is time it ends.

  17. daneale November 27, 2015 at 8:41 am

    So when will the lowly place workers get a raise in they pay package, or are you just going to tax away they pay? hope they would be able to put these taxes in the pot and cook for they family.

  18. Randyb November 27, 2015 at 9:04 am

    More tax … less money to spend….less money to spend more people on the breadline….. more people on the breadline … more tax……

  19. dave November 27, 2015 at 12:22 pm

    Thank you Tony Webster. You just reminded me that I did not pray one of my usual prayers this morning.I have just paused and done it all because of your post. Thats your good deed for today Tony./ THANK YOU.

  20. Jason Bourne November 27, 2015 at 2:55 pm

    Chris Sinckler is a man of questionable morality it seems. He basically chanted all that rubbish to make it sound as if they went with a system that would be better for all. In fact, all he’s really gone with is a system that will affec ONLY the general public and not the mobile companies directly at all.

    Since companies that are VAT-registered can claim back VAT and VAT is charged on the service at the point of delivery instead of the point at which the mobile companies build the seevice, they won’t see any impact to their cash flow or operating costs. Instead the whole burden is put on the consumer.

    Well done Mr Sinckler, you have just spit in the faces of the people who’ve entrusted the care of government resources to you and your party and proven how inept you are at managing the financial affairs of Barbados.

  21. Jason Bourne November 27, 2015 at 2:57 pm


  22. shortman November 28, 2015 at 4:32 pm

    Bajans got it rough, talk about beening caught between a rock
    and a hard place. The gangsters robbing with guns on the right
    and the government robbing on the left with legislation.


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