VAT hits party stand hard
The vexing issue of Value Added Tax (VAT) on complimentary tickets at events is raising its head again, with promoters complaining it is driving them out of business.
The entertainment fraternity has been trying unsuccessfully to have Government reverse a decision announced by the Barbados Revenue Authority (BRA) in July 2014, that “all complimentary items such as tickets and costumes, must be taxed at the standard rate of 17.5 per cent VAT”.
The promoters have repeatedly complained that it was unfair to legislate that they pay VAT on tickets from which they earned no revenue.
With Barbados’ 50 anniversary of Independence approaching its climax when a number of entertainment events are expected to be organized, the producers and entertainers are hoping for a change of heart from Minister of Finance Chris Sinckler, who, in an interview with Barbados TODAY in December 2015, had dismissed the demand as “salacious foolishness”.
Government’s position on the issue was Thursday described as “hard and fast” by President of the Barbados Association of Masqueraders (BAM) Chetwyn Stewart, who told Barbados TODAY the tax had forced some out of business, while others had been experiencing heavy losses.
“A lot of people just can’t do the events anymore and the costs are affecting it in a great way. It is just stopping young promoters now from doing events. I know that because I run the party stand, and since it has been implemented the numbers at the party stand . . . gone down by 75 per cent,” Stewart said.
He said the complimentary passes played a critical role in the promotion of events. However, in the 2015 interview with Barbados TODAY, Sinckler had explained that there was no such thing as a complimentary ticket in the VAT law, and that the onus was on promoters to control the distribution of all event tickets to ensure that they were not left holding the bag.
Stewart argued today that other industries had been receiving concessions from Government and all the entertainment fraternity wanted was to be treated fairly.
“The same way you can give hotels and other people who bring in foreign exchange or bring in people, you . . . give them reduction, the same way you should be looking at promoters and trying to work with us so that we make this thing successful,” Stewart pleaded.
“There shouldn’t be VAT on something that has no price. They [BRA] want to determine what the value is. They can’t determine what the value is. So it is a problem that promoters have. It is not just for the events. We also have that problems with the Crop Over bands,” the BAM head said.
Last December, just before Government took the amendments to the VAT legislation to Parliament, Minister of Culture Stephen Lashley met with 30 members of the entertainment industry who voiced strong concerns about some aspects of the then proposed changes, including the contentious VAT issue.
Following the talks, Lashley told Barbados TODAY: “Like any caring Government, I believe that we have to listen to them and we have to look and see if the concerns are credible and if they are credible to make sure that the proposed changes to the Value Added Tax are appropriately tweaked and changed to ensure that any valid concerns raised by the promoters are in fact addressed.”
Nonetheless, in an address in March of this year at Kensington Oval to launch the 12th annual Barbados Reggae Festival, Minister of Tourism Richard Sealy told the promoters to get used to the VAT, insisting they ought to pay their “fair share” of taxes.
“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 then.
However, the entertainment fraternity continues to insist they are not opposed to paying taxes, but that it was unfair to expect them to dig into their pockets to pay VAT on tickets for which they earned no revenue.
Veteran promoter Al Gilkes, who was first to make his position clear on the issue two years ago, told Barbados TODAY in a brief interview yesterday, he was hoping the matter would finally be resolved in favour of promoters.
“It has not been resolved and it goes from show to show . . . . From my understanding it is not being removed. It is still something that is being worked on and discussed and hopefully one of these days it will be resolved,” Gilkes said on the sidelines of the official launch of the Hennessy Artistry show at the Kensington Oval.