Duty-free for locals
Yesterday, Minister of Finance Chris Sinckler announced the establishment of duty-free zones in The City and other tourism hotspots, aimed at boosting foreign exchange revenues.
Here is the excerpt from the 2016 Financial and Budgetary Proposals on those initiatives.
Mr Speaker, currently, there are three pieces of legislation which we use to encourage investment in the tourism sector. These are the Duties, Taxes and Other Payments (Exemption) Act, Cap. 67B, the Tourism Development Act, Cap. 341 and the Special Development Areas Act, Cap. 237A. This latter piece of legislation has a wider application than the other two, to the extent that it is used not just for narrow tourism purposes but can in fact facilitate developments which the Government believes to be worthwhile within the corridors identified in the legislation, that being:
· Carlisle Bay Redevelopment area in the parish of St Michael;
· Speightstown in the parish of St Peter;
· St Lawrence Gap in the parish of Christ Church; and
· The conservation area as defined in section 2 of the Soil Conservation (Scotland District) Act, Cap. 396.
Over the years, the legislation has met with some success as reflected in the developments which have been executed but a lot more can be done.
Recently, it has come to Government’s attention that there are opportunities for tourism and other major investments, both foreign and domestic along the northern corridor, which includes Six Men’s and beyond and the recent developments taking place on the south-eastern side of the island, inclusive of Sam Lord’s Castle. There has also been a strong case made for extending the reach of the Act beyond the Carlisle Bay area to include the wider City of Bridgetown to accelerate the revitalization of our Capital.
While the legislation came into existence some twenty years ago, a review of its provisions and benefits has revealed that they remain relevant to the needs of investors. In view of this, I now propose to extend the area to which these special incentives will apply under that Act, namely:
· Northern Barbados: from Speightstown, St Peter to Harrison Point, St Lucy;
· South-eastern Barbados: from St Lawrence Gap, Christ Church to Ragged Point, St Philip; and
· From the Carlisle Bay Area to encompass the City of Bridgetown as defined by the Chief Town Planner in the Physical Development Plan of Barbados.
With these changes the country can expect to see additional investment for both tourism as well as other related developments particularly with a foreign exchange component to it. It will also add to the revitalization of Bridgetown, which is so needed.
Secondly, last year Barbados grossed over US$900 million from the tourism industry. It is felt that much more can be done to generate additional foreign currency in Barbados.
In this regard, the Government has been researching the possibility of creating duty-free zones. These zones would occupy particular geographic spaces and would allow within that sterile environment duty-free shopping for Barbadians and visitors alike. This proposal, Sir, not only has the capacity to earn foreign exchange from shopping by visitors from our region and elsewhere but will also save foreign exchange, since most Barbadians could have the option of no longer having to travel in order to shop.
Mr Speaker, we have already identified some areas where this could happen, including our capital City of Bridgetown, Holetown, Hastings/Worthing on the South Coast and at the two main ports of entry in Barbados.
Obviously Sir, it will be important that we examine all of the pros and cons of such an initiative before moving to bring the legislative framework here to this House.
In this regard, I propose establishing a Special Committee to review the initiative with a directive to report its findings and recommendations to me within three months so that a firm proposal can be brought to the Cabinet Committee on Economic Policy for review and forwarding to the main Cabinet for approval. This Committee shall comprise but will not be limited to:
· Barbados Tourism Investment Inc.;
· Officials of the Ministry of Finance and Economic Affairs;
· Representatives of the Central Bank of Barbados;
· Barbados Chamber of Commerce and Industry; and
· Private Sector Association of Barbados;
The Committee will have the right to co-opt any other person or parties that may be considered necessary in assisting it in carrying out its mandate. It should be appreciated that the implementation of such an initiative will give Barbados a definite competitive advantage in the area of shopping which most studies have found to be an area of concern for visitors to Barbados. My hope is that with a concentrated effort by all parties we can at least have the City of Bridgetown ready for this type of business before Christmas. Shopping within the duty-free zone will be done in foreign exchange, not Barbados dollars.