What is the Status of 7.50% VAT?

Adrian Loveridge - Hotelier

Adrian Loveridge – Hotelier

When Government announced last year that it was passing a bill to allow the lowering of Value Added Tax (VAT) to 7.5 per cent for qualifying hospitality partners my initial thought that it was a wonderful opportunity to at least partially address the frequently quoted high costs of our tourism product. The criteria did not appear too ominous. That the entity had to be registered with or a license from the Barbados Tourism Authority, Barbados Hotel and Tourism Association or Small Hotels of Barbados Inc, it was in compliance with all statutory obligations of the Income Tax, NIS and Social Securities Act and was able to demonstrate to the satisfaction of the Comptroller and generates at least 75 per cent of total earnings annually in a foreign currency.

In our 26 year experience the vast majority of guests pay via credit card, I would not have thought this was difficult to verify. These imposed conditions would seem quite reasonable and for most attainable.

Why then have so few seemingly eligible tourism partners registered successfully and applied the lower rate of VAT. After all, 10 per cent of the final cost to the consumer is not an insubstantial reduction. Looking at menus posted on the websites of many of our hotels with in-house restaurants or stand alone establishments 17.5 per cent VAT is still shown, which includes some of the big names and unless they have yet to be updated state owned accommodation providers are included in this. Interestingly, this applies even to businesses where their owners or managers sit on the board of the national marketing authority.

So what has gone wrong? Is this once again a case of implementation deficit? Originally the measure was announced in the 2013 budget submission, so does it really take so long to process registration applications?

Minister of Finance Sinckler stated during that presentation, the concession would cost the Treasury $9 million annually across the entire sector, or roughly the same amount that Sandals Barbados would avoid in VAT payment for the same period when re-opened. You only have to go onto the Barbados Forum section of TripAdvisor to quickly gauge that price or what is perceived by many of our visitors, is less than value-for-money is one if not the most discussed topic.

As we enter the long eight month softer summer season, the cost of our tourism offerings is going to become even more critical to final destination choice. Certainly the current high value of Sterling against the Barbados Dollar, reaching within 3 cents of a four year high recently is helping make us more attractive to the ‘Brits’. But this also applies to many other holiday offerings around the world.

While welcome, the benefits from the amendment to the distance band of the APD (Advanced Passenger Duty) will not have any meaningful effect until almost a year from now. And this will be largely diminished during the next twelve months after British Airways decision to hike many Caribbean airfares by GBPounds 10 per ticket with immediate effect with Virgin Atlantic expected to follow.

54 thoughts on “What is the Status of 7.50% VAT?


  1. You seem not to understand this Government: nothing works of them. They seem to have what can only be described as the reverse-Midas touch.


    • @Caswell

      Didn’t the minister state in a press conference that the 7.5% VAT issue was implemented or are we mistaken?

      On Monday, 21 April 2014, Barbados Underground wrote:

      >


    • David

      It is not unusual for the Minister Sinckler to state something publicly which turns out to be untrue. For example, when I called in on the radio and stated that there were going to be lay offs, did he not deny it publicly. I remember seeing him on television addressing the Chamber of Industry & Commerce denying it and calling me a street character. These people running a government is like monkey handling musket.

      >


  2. Imagine that in circumstances where the majority of persons in Barbados have a great deal of power and influence to stop some people calling themselves the government from stealing and robbing from them out of countless portions of their own incomes, revenues and transfers, there is the idea questioning when and for whom a tax rate will become effective.

    Indeed, when we say TAXATION is demonic, that situation is clearly an inkling of evidence of the demonism associated with TAXATION itself.

    PDC


  3. Barbados is all about free (Education, Health, and Tourism), that’s the problem! How many other wealthy countries in the world can afford to giveaway such freeness. If your going to reduce the VAT to 7.5%, do it for everyone.

    Then start to look at other sources of revenue. The road tax is a joke, given the conditions of the roadways (collect it). What is owed in land tax (collect it). Make the education system self sufficient thru tuition. Be proactive in the health field; offering selective checkups, and discounts on certain drugs. Too many bureaucratic jobs in government that should be eliminated thru review, and job performance.

    Can you guarantee that the hotel industry won’t raise their rates when the VAT is reduced. Lets face it, big business is always looking out for itself. But, whose looking out for the little man?


  4. @PFC
    How are you? Do you believe in an institution called the state? And, if so, what do you see as its role?


    • @racehrse

      You make an interesting point just look at how the airlines have responded with the removal of the APD.


  5. David, Yes and no! The current Virgin Atlantic 5 day sale is offering some of the lowest return fares ever available by them to Barbados from Manchester (GBPounds 438). Prices have not fallen from Gatwick because British Airways and Virgin charge the same. However on Manchester, Virgin has to compete with Thomas Cook. Market demand and this will also apply to hotel rates where the property is largely dependent on tour operator business.


  6. Adrian

    On the subject of prices, you may be interested in the prices in a full page Sandals/Sunquest/Redtag.ca ad in the April 19 Toronto Star Travel Section. All are per person and include taxes and surcharge in CAD$.

    Jamaica Grande Riviera – Sep 30 $1,729.00
    Jamaica Whitehouse Sep 9 $1,819.00
    Jamaica Negril Beach Sep 10 $1,949.00
    Jamaica Royal Caribbean Jul 9 $2,069.00
    St. Lucia Halcyon Beach Sep 21 $1,899.00
    St. Lucia Regency La Toc Oct 28 $1,969.00
    Antigua Grande Antigua Sep 13 $2,383.00

    Also include up to $400.00 per couple in Sunquest Air Credits and $100.00 Excursion Credit.

    As is normal, there are no Barbados properties listed in any of the ads in the Star Travel Section.

    On its website for Sep 21 Suquest has The Crane posted at $2,204.00 European Plan vs the Sandals Halcyon St. Lucia property @ $1,899.00 All (Luxury) inclusive.


  7. DD, Thank you. When my wife and I stayed at Sandals Barbados last December the very last description I would give the property or product would be luxury. A single choice of red wine and pretty ordinary (sometimes inedible) food. For the US$400 we paid a night I would have far rather stayed in a hotel like Coral Reef, Cobblers Cove or Colony Club. Luxury Link has a package with Cobblers which offer 7 nights room, daily gourmet breakfast, dinner, afternoon tea, all taxes and quite a bit more for less than US$400 per room (two persons) per day. Nothing would induce me to stay in another Sandals unless they could demonstrate a far better product or it was half the previous cost. I am still waiting for the Barbados Statistical Service to post March 2014 arrival figures, but it would appear that Canada is down again.


  8. Hal Austin,

    We know that there a political institution called the state.

    And that it must have a distinct name.

    It must also have titles, symbols, rituals, and ceremonies to define it from other institutions that it comes or does not come in contact with.

    It must be recognized as a state by at least one other state in this wider world, and its must have certain rights and privileges and duties with this said wider world.

    For PDC, the state exists over and within clearly defined and unified geographical territorial, nautical, aerial spaces.

    For us, too, the state does not have an existence separate and distinct from its human members.

    Thus, the state – many years ago in Europe – came out of human beings who existed within a community of people, and as such it must always be accountable to the same community.

    The people are the masters (Edmund Burke).

    Those who are the state have their own fundamental values, ideas, philosophies, principles that they practice via use of the state apparatuses and organs they manage and control, via use of their own private public associations with others, via use of their own “natural” movements and energies, via use of their own civil political rights, and providing of their own expressions.

    It is such processes that help to define – in the eyes of many other people – what type of state that exists any where in this world.

    The primary role of the state is to manage the social, political, material and others affairs that fall within the jurisdiction over which it has ultimate sovereign control.

    One of the primary means through which such is achieved is through the enactment of laws and policies to – more or less – achieve certain specified ends.

    Other roles of the state include clearly defining the political legal and other relationships between itself and its multifarious components, and between itself and the other human beings (citizens or visitors) falling within the above referred to spaces (express via fundamental laws and conventions) – and properly managing the interrelationships between itself and other international state and non-state actors.

    There are any number of arms of the state.

    Now, Hal, what does all the aforegoing have to do with TAXATION?

    PDC


    • @PD c

      To summarize your above comment, a democracy is acted out through its governance structures give or take a word or two.

      On Monday, 21 April 2014, Barbados Underground wrote:

      >


  9. @Adrian

    Your postingsseems to be contradictory’ You aske d the question why so few institutions were sucessful in registering for the 7.5 vst. From your reasonging, it means that the program is in place, am i correct. If your answer is in the affirmative, then you need to do your research to ascertain which institution have applied and met the requirements.

    @Caswell

    If Adrian said that some insittions are successful, then you need to revisit your statement..


  10. @ Adrian Loveridge & Due Diligence:

    Just a query seeking clarification.

    Would the local residents who patronize those “qualified” establishments be entitled to the lower rate of the VAT?


  11. Miller, you have raised a very good point. If the entity has registered successfullythen I don’t understand how they could be refused. If I eat or stay in one of the approved establishments, I will be be charged 7.5 per cent VAT and not 17.5 per cent. If a registered entity then accepts a high percentage of annual businesses than 25 per cent paid in BDS$, then technically it ceases to qualify. Sounds like a nightmare to police or administer.


    • @Adrian and Miller

      Has the Point of Sale devices at the establishments registered be en modified and certified appropriately?

      Who is championing the cause of the consumer in this regard?


  12. David, If this is or can be done, then it would be very easy to see what percentage of Sandals Barbados revenue is collected offshore. It would be interesting to know if the Central Bank monitors credit card transactions.


  13. David,

    A democracy can be evolved out of the many things we referred to in the relevant PDC above, and that pointed to the human ideological philosophical psychological political value, etc make up of those that are the state and obviously the human ideological philosophical psychological behaviours values etc of the citizenry associations and other people in Barbados with respect to the movement towards a democracy.

    As it stands at this stage Barbados is NOT a democracy but an oligarchy in the sense of what type of political governance and management there is at all national levels of the country.

    There are however many institutions and organizations in this country at the sub-national levels that can be described as democratic or that are exhibiting democratic tendencies.

    Democracy can be defined as a political process in which every person of organization society and of reasonable age and sound mind has the opportunity or the right to take part in the processes of conceptualizing, deliberating over and making decisions or policies that will have any impact on them at whatever time, and too the opportunity or the right – by virtue of the same described processes – to not only bring about alternative decisions or policies but also to substitute the original decisions and policies for later ones in a reasonable and timely manner.

    PDC


  14. @PDC
    The primary role of the state is to manage the social, political, material and others affairs that fall within the jurisdiction over which it has ultimate sovereign control.

    PDC, without some form of taxation, how do you propose to pay for the above? Or will there be enforced voluntarism? ,


  15. “racehrse | April 21, 2014 at 8:40 AM |
    Barbados is all about free (Education, Health, and Tourism), that’s the problem! How many other wealthy countries in the world can afford to giveaway such freeness”

    My friend, contrary to what you believe, there is nothing free from Gvernment, we pay the highest taxes in the entire Caribbean purportedly to offset the costs of the services for which we do not pay up front.


  16. Hal Austin,

    We direct to a BU post that was published on the 24th of February, 2014, for greater insight into, and understanding of, our theory of NO-TAXATION for Barbados.

    As well revisit the recent blog – titled We Want To Know – for pursuance of such too.

    The various relevant PDC theoretical outlines will – we believe with enough thought applied by you – give you that insight and understanding sufficient to appreciate at this stage that the is a vision for a post-TAXATION society for Barbados.

    Also, if you have the time, go to the many of the relevant submissions and posts that we made between early 2011 and the ending of 2013, to BU dealing with the COST OF USE OF MONEY THEORY, and you will see that one does not pay for any commercial good or services and far less a government paying for the social political material and financial affairs of this country.

    You do NOT pay for a commercial good or service, what you do is create the use of money out of your nominal incomes, revenues and transfers.

    There are costs to your nominal incomes, revenues and transfers when one creates the use of money – under whatever commercial circumstances – and from such one is seen to be giving such portions or all of the remunerations to others as nominal incomes, revenues and transfers.

    There are however costs to the use of money (local), when banks, credit unions, finance houses, insurance companies, stock exchanges, after having – at earlier points in time – got local money (deposits of nominal incomes, revenues and transfers) at their establishments from any persons, businesses and other entities – under particular contractual arrangements – have – at later times and for whatever durations – to give to those persons, businesses, and other entities, out of the total monies held in the institutions, the equivalent in local money terms (only money) to the remunerations deposited already – plus interest given – or the premiums given or shares got already, for their use of the money concerned.

    And there is the other hand where any persons, businesses and other entities – including government – who would have at earlier points in time got direct/indirect access to the use of money – under particular contractual arrangements – from banks, credit unions, finance houses, insurance companies etc., at their establishments have – at later times and for whatever durations – to give to those same latter institutions the equivalent in local money terms (only money though) to what monies that were able to access and use, plus any interests, any fees agreed to – out of the relevant portions of or all of their nominal incomes, revenues and transfers – for the use of the monies concerned.

    Realize too that we have finally released the term, payments, as a form of remunerations to individuals, businesses and others in this country. We were waiting on the right time to do so.

    Hal, realize that having regard to the use of money by many people in the relevant commercial contexts in Barbados and that having regard to the cost of use of money (local) that the Theory of Value and the idea of prices of “this and the next” are so grossly flawed, erroneous, misleading, and impractical, and that they are really non-existent.

    PDC


  17. @PDC
    I have said before, I have a lot of admiration for your blogs as one of the few on BU that concentrate on dealing with issues and ideas rather than cynicism and vulgar abuse, but, to my mind, your theory is flawed.
    I admit that this forum is not the place for a detailed debate, but as I understand your no-tax proposal, it will shift wealth from the poor to the rich, especially through inheritance, but also through corporation tax and property and land tax.
    The various import tariffs favour the wealthy and business people and in a society that has a disproportionate trade deficit, and in which wealthy foreigners on the West Coast and the hotel industry surf on ordinary tax payers, your policies will reinforce this. Sandals is but the latest and best known.
    There is no provision for the transfer of wealth from the super-rich to the poor and a peaceful society must be built on equality of opportunity. I also think you need to widen your policies in to a full manifesto to present to the Barbadian people.
    But let us continue this discussion.


  18. Hal Austin,

    You inferred that our alternatives to TAXATION will shift wealth from the poor to the rich, especially through inheritance, but also through corporation tax, property tax, land tax??

    Aside from the fact that we are going to remove taxes in this country, but yet you are still in the mode of writing about taxes in that above issue, which shows a little confusion there, can you tell us what are some of your assumptions that THE REMOVAL OF ANY THING ( in this case TAXATION) CAN BY ITS NOT BEING THERE CAUSE SOME THING TO HAPPEN ( in this case THIS SHIFT THAT YOU WRITE ABOUT).

    Indeed, we also need to reinforce the scientificism behind our NO-TAXATION THEORY.

    And as you so righty said in your above 9.13 am post, let the discussion continue.

    PDC


  19. @PDC
    Let me put in in simpler language: by removing ALL taxation you will simply be making the wealthy much richer.
    Is that good enough? Apart from confiscation of property, taxation is the simplest way of redressing wealth.


  20. @PDC
    I am trying to understand your position. You abolish all forms of taxation, there will still be a state with many, if not all, of its functions.
    There will be no compulsory seizing of private property, businesses will continue to run, while paying no taxes.
    I am sure I am not the only one, but how are the state institutions going to function, apart from voluntarism? How are we going to halt the widening of inequality?
    In our relations with other jurisdictions (presumably we will still have foreign relations a trade) how are we going to meet out obligations?
    I want you to expand your policies apart from the abolition of taxation. I got that. Tell me the rest. How is society going yo function?


  21. Hal Austin,

    Did you check the particular thread that was published on BU, on February 24, 2014, to gather greater insight and understanding of what are going to be the alternatives to TAXATION, and what are going to be some of the supporting structures for those alternatives to TAXATION?

    We are not seeing you address many of the relevant issues covered in the particular post.

    We are seeing many repeats in your questions in each succeeding blog that you have addressed to you, which may suggest you are not delving into the alternatives themselves.

    We last week on here gave you insights into some more of our policies, el at, the proposal for the establishment of an Hire Purchase Relief Fund.

    PDC


  22. @PDC
    They are repeats because I am not getting clear, simple answers. Anyhow, let us end the discussion. Good luck.


  23. @PDC

    Not to be synical, but all I hear from you is no taxation. What I don’t hear is your plan to replace it. Were not interested in the dynamics of how government should operate, Were interested only in what comes out of our pockets, and what we get for it.. Because you’ll never get anything that’s free. So tell me PDC you don’t want good roads to drive on. You don’t want to be safe from criminals, or put them behind bars. You don’t want to receive a pension when the time arrives to retire. You don’t want good health care, or education. I suggest you watch these movies: The Postman, The Book of Eli, The Road, and even Mad Max……These ar the place of no taxation.


  24. The person going by the pseudonym – racehrse

    It is clear that you have not been following us on here given that you stated that all you hear (?? – see us write) from us is no taxation.

    Well can you go to a particular blog done on BU on February 24, 2014, and see and analyze what we wrote about our vaunted NO-TAXATION theory.

    There have been so many issues that we have been dealing with on BU since first coming on here in 2007/8, when there were at the time far fewer commenters than now, it is almost amazing.

    PDC


  25. @PDC

    I can’t find your reference. Copy, and paste it here. And, secondly what does the number of commenters have to do with the price of tea in China.


  26. The person going by the pseudonym – racehrse

    The post is under the thread – Notes from a Native Son: How the IMF Missed an Open Goal, Part (11), and it was published on February 24, 2014.

    We agree with you. What does David’s assumption about the majority of commenters not understanding our vaunted No-TAXATION theory have to do with the assumptions, propositions, hypotheses, principles related to the theory itself?

    Do you think that many of these people who have actually said that they do not understand have been actually trying to understand the theory itself?

    We suppose that some of them have been putting credence in the absolute rubbish that we have heard spoken seen written by some persons, that only two things are certain in human life: DEATH and TAXATION.

    Such rubbish squares with how some people many years ago thought the world was flat until it was falsified by many others; squares with the total ignorance that man evolved from monkey; squares the smelly garbage of some people years ago that Africans contributed little or nothing to western civilization – which has been completely disproved by many historians, Egyptologists, and others across the world; is parallel with the total junk that some people of this western world used put out – AIDS came from black people, homosexuals, etc, and which is another myth that has also been torn up by many other people; and finally is also parallel with one of the most destructive lies and myths by a few idiots inside and outside of the Bush jr Administration in recent living memory – that Iraq possessed weapons of mass destruction – which was also proved by many persons across the world to be what it ever was a massive lie.

    Well, for those people, in Barbados, that have been wrongly falsely thinking that this evil wicked TAXATION is as certain as death, we must must say we have one very certain thing to say about it: DEATH TO TAXATION!!

    PDC


    • @PDC

      It is simple, BU commenters represent the type of person who comprise general population. If you can’t convince people in this forum – who are not idiots – who are trying to understand your message what do you think will happen if you go mass with your message?

      Anyway carry along smartly.


  27. @PDC

    I found your your comment from Feb. 24th. I read it three times, and it’s as clear as mud. From what I can gather is that your purposing going back to a barter system, privatizing certain government services, keeping certain government services, and all without taxation. Would you be interested in some ocean front property in Arizona? The cost is: 3,000 gallons of Mount Gay Rum. By the way how do you propose to acquire it? Do you own cane fields, or a distillery?

    The point is Money, and Taxation is a necessary evil. It may not be perfect, but it’s our best option. It’s what we do about it when our politicians become involved.


  28. “newblood | April 23, 2014 at 4:39 AM |
    @Balance
    r u sure we pay the highest taxes in the cbean? can u give some examples?”

    Good query, Newblood, I ought to have said that we pay some of the highest taxes in the Caribbean except for personal income tax which stands at 55% in Antigua and Barbuda as opposed to 37.5% in Barbados. However, examples of taxation levels are as follows:
    Tax revenue (as % of GDP) Bdos 29.8 / Guyana 29.1 / Grenada 27.9 / St Vincent 26.9
    Vat revenue as % GDP Bdos 9.3 / Jamaica 7.6 / Trinidad 4.3
    Bear in mind that Bdos is the only country where the VAT rate exceeds 15%
    corporate income tax in Bdos stands at 37.5%
    Antigua 35% and Belize 25%
    Property Tax
    Bdos 1.9
    Grenada 1.4
    Bahamas 0.9
    Montserrat 0.8
    Antigua 0.5


  29. To the person going by the pseudonym – racehrse

    You obviously have read – BUT not properly – the entire thing. For if you had, you would not have come to the conclusion that we are purposing going back to the barter system.

    A theory of NO-TAXATION that focuses on enormously freeing up the circulation of money, and rightfully stopping the uncivilized barbarism of a government – albeit in a scarcely modernizing Barbados – stealing robbing countless portions of the remunerations of multifarious entities – cannot be about our purposing a barter system.

    A barter system cannot survive in a money system.

    They are diametrically opposed to each other.

    We take note of your claim – in your blog just above – that you read it three times – and we do not doubt you – but what is so instructive to us is that – in the same blog – you blogged not one question about the number of propositions contained there in.

    Therefore, you mean not a question about the outlawing of the issuing of government paper (Treasury Bills, Debentures, Savings Bonds, etc)??

    You mean not a question about “well conceptualized, properly coordinated and capably voluntary civic citizens corporate initiatives for purposes of taking over (via adoption agreements) and providing for the development or maintenance of certain aspects of the people’s properties and land they have ownership of right over, for the primary purposes of the people in Barbados benefiting and gaining and not for any personal private benefit or gain on whosoever’s part”?

    Is this not similar – to some extent – to the Preconco-Government agreement for Preconco to help maintain, et al, the highway from Grantley Adams Airport to right down to St. Peter/St. Lucy?

    You mean not a question about the propositions on National Institutional Non-Repayable Productive Loans Scheme and the National Institutional Non-Repayable Non-Productive Loans Scheme?

    And you properly read?

    However though you are correct in your conclusions that we are about keeping certain government services and privatizing certain others.

    PDC


  30. “To compare tax policies across the region it requires a wider analysis.”
    The examples were only to satisfy Mr New blood’s requests but i take your point.

  31. Pingback: What is the Status of 7.50% VAT? | Black In Barbados


  32. David I just read that the new BTA boss is some genuine “eye candy”.

    BAFBFP would probably agree.

    Hopefully a pretty face with brains.


  33. This BTA restructuring is interesting.

    Hope they are smart enough to leave some experience in place during the upheaval.


    • They have hired a global headhunter to fill the new CEO position but inevitably politics will play a part.


  34. The CEO should be a person with a proven track record and he must be allowed to do his job without political interference.

    Otherwise we will be spinning top in mud.


  35. @ The two man PDC party

    Let me give you a little hint you two clowns.

    Even the dumbest blogger here understands that it is only by constant repetition that your readers are able to recognise that (i) either you believe in the classic dogshite that you are intoning (ii) you have it written down somewhere and cut an paste it religiously or (iii) that you are a raving lunatic that the Green Gates horspital has yet to realise is on the loose and send one of the three wheel vans for your lunatic donkey.

    Now let me explain why those among us who are wiser beleive that it is definitively number 3.

    You mean to tell me that some bukvnt would go back through the archives and look for your submission of February-some-freaking-date (tmesis again) to see your mad ass posting about taxes combined with a Monopoly Game construct that has replaced all of Monopoly’s customary parts with a Charles Manson loony bin Ludo and snakes and ladders derivative.

    But i have had the Eureka moment during your ramblings.

    It is quite brilliant actually and it is this.

    You are familly to, or on the payroll of, Fumble and Chris Buffalo Stinkliar.

    They have paid you to come here and rant and rave so that people, in a fit of desperation will say, we cannot elect a drunkard, Owen Seethru, we cannot elect a CRS (Clitoris Removal Specialist – Mia) we cannot elect this No Taxes, Special Relief Fund Madmens Mark Adamson nor Akil Umi, lest we have to use our pooches to barter for food on Bush Hill SO we only have one choice, WE STICKING WITH FUMBLE!!

    Oh i forgot David Commi sing a song of six pence, he too busy wid the Chavez/maduro tingy to run for politrics bout heah agin, plussing he still owe the man dat drive he round pun he open back suzuki van for his “victory lap in 2008”, I guess de Maduro bolivares check for the “Friends of Chavez” ent come to Bulbados yet….

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