No VAT break for promoters on free tickets
Get used to it.
That was the message from Minister of Tourism Richard Sealy to promoters and entertainers who have complained bitterly about the imposition of Value Added Tax (VAT) on complimentary tickets for various events.
In an address at Kensington Oval last night to launch the 12th annual Barbados Reggae Festival, Sealy insisted that the promoters must pay their fair share of the tax.
“Everyone has to pay VAT and I’m saying that you are going to have to look or accept that there will have to be a situation where the VAT that is incurred can be settled.
“That doesn’t mean that we have to stop looking for ways and means to encourage what is a crucial subsector. But I think we must also accept that if everyone else has to pay VAT that our promoters and providers of entertainment services will also have to pay their fair share,” he said.
The controversial issue of the 17.5 per cent VAT on complimentary passes was brought to the fore last Crop Over by a group of prominent entertainers, including the directors of FAS Entertainment, organizers of the reggae festival.
They complained at the time that it was unfair to expect them to dig into their pockets to pay VAT on tickets for which they earned no revenue.
Sealy said their position was understandable and reiterated that their concerns were not being swept under the carpet.
“We are not running away from the issue. It has been raised here at this spot with good reason and I think we have to figure out ways and means that we can do it. [The Ministry of] Culture has taken the lead and I can assure you that they are taking it very seriously and we are seeing what we can do with regard to the various in posts on the cultural activity,” he stressed.
Promoters have also complained that a 25 per cent withholding tax on foreign entertainers was onerous. Sealy said there was a possible opening under two pieces of legislation for relief with that levy.
“With respect to the withholding tax there may be some possibilities there. The Cultural Industries Development Act is patterned off the Tourism Development Act in many respects. Between TDA and CIDA there may be some possibilities where we can look at what we can do in terms of relief that legitimate players can qualify for.”
Additionally, the Minister of Tourism revealed that the Barbados Tourism Marketing Inc (BTMI) would increase its investment in the reggae festival because of the benefits to the country.
“The BTMI is going to be putting more resources behind this festival than any other previous effort, and we are doing that for good reason. We get a lot of regional movement into Barbados for the reggae festival.”
He added that an increasing number of extra-regional visitors come to Barbados for the event, with 600 of the 1,400 who came last year travelling from outside the Caribbean.
However Al Gilkes, a director at FAS Entertainment said the controversial issue of VAT continued to place a dark cloud over the celebrations.
“In front of every silver lining, there is a dark cloud. For us in the entertainment industry that cloud takes the form of an ongoing struggle entertaining the entire business industry with regard to the Barbados Revenue Authority and how the payment of the 25 per cent withholding tax by and on the behalf of foreign entertainers who perform in Barbados, as well as the recently implemented 17.5 per cent vat on all complimentary tickets and payable at the market value at tickets which are bought in the box offices,” he told the launch.
Gilkes also revealed that the new grouping of promoters established to advocate for better terms, the Barbados Entertainment Business Association, would soon be launched with approximately 75 members.