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VAT effect

Barbadian mobile phone customers have cut back on data usage and have increased Wi-Fi use since an additional 4.5 per cent was added to the Value Added Tax (VAT) on cell phones at the start of the year.

Government announced last year it would raise the VAT on cell phone use from the standard 17.5 per cent to 22 per cent effective January 1 to raise $14 million to fund university scholarships.

A check by Barbados TODAY one month after the increase took effect revealed that while some customers have taken it in stride, many have adjusted their usage habits in order to avoid digging deeper into their pockets.  Warick Piggott, a prepaid customer of both mobile providers Digicel and Flow but who “mostly like Digicel” said he was not bothered by the increase.

“I usually use a prepaid $10 card and when that gone, it gone. I don’t really check for the rates. Once I get to make my calls I am okay,” said Piggott.

“It is the same thing for Flow. I use Flow to call Flow numbers and use Digicel to call Digicel,” he added.

Meantime, Flow mobile user David Rowe said he had not been tracking the cost, but he said he had noticed a change last month. Still, he was unperturbed because he had been using his phone a lot more in recent weeks.

“What has happened that would skew it [the amount I pay] is that I used it [my cell phone] a lot more in the last six to eight weeks. So my usage would have been increased anyway. So I am not sure it will be due to one [thing] or the other.

“I have a pay-as-you-go kind of system and I realized the credit was not going as far as it was before. I have to be topping up a little bit more often. But like I said I started several things in the last six to eight weeks, which meant that I am in for paying a lot more,” Rowe explained.

However, Flow customer Maria Alleyne told Barbados TODAY she did not intend to spend any more than $20 for the month on calls and data.

“I just wait until I get home and all my messages will come through because I pay for my landline and Wi-Fi so I just use my Wi-Fi when I get home,” Alleyne said.

Like Alleyne, a woman who would only give her name as Katie said she too was watching every cent. Therefore, she has cut back on the amount she spends on phone cards and depends a lot more on Wi-Fi in direct response to the 4.5 per cent VAT increase.

“It is affecting me because although I do the top up the increased taxes are still coming off, so it is affecting me. I don’t have a data package. I use Wi-Fi when I am using Whatsapp and if I need to make a call then I do a top up,” said Katie.

The story is the same for Digicel customer Evett Green who told Barbados TODAY that before the announced increase she spent about $40 per week on calls and data packages. However, she has changed her spending habits and now spends half as much on phone credit.

Barbados TODAY was unable to ascertain the number of subscribers to Digicel or Flow mobile services. However, the latest data from the Telecommunications Unit of the Division of Energy and Telecommunications showed that at the end of 2014 there were 235,767 prepaid mobile subscribers on island, an increase over 2013 figure of 233,792. Among them were 68,689 postpaid mobile subscribers, down from 73,916 at the end of 2013.

Consumer rights advocate Malcolm Gibbs-Taitt told Barbados TODAY he remained concerned about the impact of the VAT rise and the apparent lack of a desire by consumers to fight those who are “ripping us off”.

“As a people, we just shrug our shoulders and [are] carrying on irrespective of who is ripping us off. That is the way we are. Yet we will go in rum shops and bars and complain bitterly that things are wrong. But we are not the sort of people who will band together and fight for our own rights. That is the unfortunate situation and it makes the work or a consumer body almost impossible because the people we are supposed to be fighting for, one would get the feeling they don’t need to be fought for,” lamented Gibbs-Taitt.

2 Responses to VAT effect

  1. Robert Holloway
    Robert Holloway February 4, 2016 at 1:13 am

    When there is a will there is a way 🙂

  2. Maria Leclair
    Maria Leclair February 4, 2016 at 2:38 am

    There are somethings in life you can live without!


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