Government will delay the introduction of value added tax on online transactions by two months.

This disclosure came today from acting Minister of Finance, Ryan Straughn, who explained that Government was in the process of bringing legislation that would allow the Barbados Revenue Authority (BRA) to delegate authority to a third party for the collection of taxes online.

“That legislation is currently being prepared and once it is laid in Parliament, we will have the legal authority to collect taxes for online goods and services consumed in Barbados.  Secondly, the procurement process to select the vendor is also still ongoing, given that the BRA does not possess the technical capacity to collect such taxes.

“We are working towards a December 1 implementation date, by which time we should have the legislation, the appropriate vendor and technology in place to allow Barbados to collect taxes in the online space for those goods and services that are consumed in Barbados, but sold through the various digital platforms,” he stated.

The Minister, however, gave the assurance that Barbadians would not be taxed twice for any of the online purchases because the technology allowed for validation between Customs and the BRA.

Acting Minister of Finance, Ryan Straughn. (FP)

He noted that the Health Service Contribution, in which employees and the self-employed would pay one per cent and employers 1.5 per cent, and the Airline Travel and Tourism Development tax would still be coming on stream on October 1.

Regarding the Health Service Contribution, Mr. Straughn said legislation was being drafted so that once the money was collected by National Insurance, it would go to the Queen Elizabeth Hospital and not to the Consolidated Fund.

“So we had to make that amendment in the legislation to bring that initiative into effect.  We certainly anticipate that by mid-October the legislation could be passed in Parliament that would give the legal authority for the collection of the money,” he stated.

With regard to the Airline Travel and Tourism Development tax or departure tax, Minister Straughn explained that it was currently collected through ticketing, and stressed that this would continue.

In the Budgetary Proposal and Financial Statement 2018, which was delivered in June, Prime Minister Mia Amor Mottley announced several revenue collection initiatives, which have been implemented at different stages.

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