One of the five remaining shopping days before Christmas will be a VAT-free day.
This was revealed by Minister in the Ministry of Finance, Ryan Straughn, during a press conference at Government Headquarters, Bay Street, St Michael on Monday.
“The Government of Barbados has agreed that Wednesday, December 21, 2022, shall be a VAT holiday in Barbados,” he said.
“As the case last year, the objective is to provide a welcomed ease for consumers, which is obviously on top of what has happened already for the year and we feel that the timing is right with respect to being able to do this in a significant way.”
Straughn said that he expected consumers to benefit from the 17.5 per cent reduction in prices in this yuletide season and be better able to ‘stretch their budgets’.
He noted that eligible goods must be available for sale with immediate issuance or delivered to the customer on the day and orders for goods that were not in stock did not qualify.
Hire purchase sales were eligible.
However, he reminded the public of the goods not eligible for the VAT discount.
“Credit purchases or goods on consignment or from wholesale distribution centres are not eligible. Motor vehicles, gasoline, LPG, diesel, guns, ammunition, cigarettes and alcoholic beverages are not eligible. The supply of accommodation is not eligible,” he disclosed.
Due to the VAT holiday, businesses are expected to file their VAT returns as usual but record zero-rated supplies on Wednesday.
This means that businesses will enter the items for the VAT return as zero-rated sales in line 105. This will allow the [Barbados Revenue Authority] to track the amount of sales and VAT foregone for the day on Wednesday, “ensuring a risk-based approach for auditing purposes.”
Straughn noted that companies have to provide sales data receipts specifically to the VAT holiday.
They will also have to issue a tax invoice to the customer with VAT recorded at zero per cent.
“As the supply is zero-rated, the recovery of input tax is permitted and the business can recover the VAT initially paid,” he said. (AL)