Address to the Nation by Prime Minister Mia Amor Mottley – July 14, 2022. (PMO)

Householders can expect to see a reduction in their electricity bills shortly as Government announced a reduction in the Value Added Tax on the first 250 kilowat hours.

Prime Minister Mia Amor Mottley, in an address to the nation this afternoon, said the VAT on residential bills would be reduced from 17.5 per cent to 7.5 per cent from August 1, 2022, to January 31, 2023 – a move that would cost Government over $10.5 million dollars a month, or half-million dollars for the period.

Ms. Mottley added: “The reality is that the Government has determined now that every Barbadian household should have the first 250 kilowatt hours removed from the VAT rate of 17.5% to a new VAT rate of 7.5%. This is going to represent on average a savings of about $17 to every Barbadian household, regardless of whether you use 250 kilowatt hours or not.”

She explained that based on data from the Barbados Light and Power, 63 per cent of all households across the island use 250 kilowatt hours of electricity or less.  This would result in a change in the electricity bill from $204.46 to $187.06.

The Prime Minister said that many households were facing unprecedented challenges as a result of “external shocks due to external factors”.

“We don’t produce or consume enough oil and gas or other energy products to influence the supply and demand chains.  But we suffer the effects of prices that we can hardly bear… Each day, we devote a high percentage of our time, our energy and our intellectual capacity looking for new ways to cushion the shock of our nation, and indeed to shield you, our people,” Ms. Mottley underlined.

Minister in the Ministry of Finance and Economic Affairs Ryan Straughn is expected to give a Ministerial Statement in Parliament on Tuesday, where this and other measures to ease the cost of living would be explained in greater detail.

julie.carrington@barbados.gov.bb

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