(CMR) There were long lines at business establishments across Barbados on Monday, 20 December, as people took advantage of a tax-free shopping day offered by the Mia Mottley administration.
The Mottley administration had announced that Barbadians would have a tax-free shopping day on Monday.
On Saturday, the announcement was made by Finance Minister Ryan Straughn, who said that consumers would be exempt from paying the legislated 17.5 percent value-added tax (VAT) on goods and higher purchase sales.
This initiative was intended to make it easier for shoppers who have been financially challenged over the past few years and allow them to stretch their budgets.
Goods eligible for the VAT concession include goods available for sale with immediate issuance or delivery to the consumer on the day and higher purchase sales.
Those that do not qualify include goods not in stock; credit purchases or goods on consignment; motor vehicles, guns, ammunition, cigarettes, and alcoholic beverages.
Companies or businesses are expected to file their VAT returns as usual but instead record zero-rated supplies for that day.
Straughn said this would allow the Barbados Revenue Authority (BRA) to track the number of sales and VAT forgone for that day, ensuring a risk-based approach for auditing purposes.
“In filing the VAT, a company must provide sales data or receipt specifically for the VAT holiday. Companies will have to issue a tax invoice to the customer with the value-added tax recorded at zero percent. As the supply is zero-rated, the recovery of input tax is permitted as the business would be allowed to recover the VAT initially paid on the items,” he explained.
Straughn said the VAT holiday would represent what he considers to be a “win-win” situation for both the consumers and businesses.