The Ministry of Finance announces that Wednesday, December 21, 2022 shall be a VAT Holiday in Barbados.
The objective is to provide a welcome ease for consumers who have faced 33 months of significant economic challenges due solely to the impact of the COVID-19 pandemic and more recently the effects of the war in Ukraine. At this Yuletide season, consumers will see a 17.5 per cent reduction of prices for those goods that attract VAT on Wednesday and hence will be able to stretch their budgets some more.
The public is asked to note the following conditions.
Eligible Sales:
- ONLY goods are eligible;
- Eligible goods must be available for sale with immediate issuance or delivery to the customer on the day;
- Orders for goods that are not in stock do not qualify;
- Hire purchase sales are eligible (this is to facilitate those persons who may not have ready-cash to make purchases at this time);
Credit purchases or goods on consignment or from wholesale distribution centres are NOT eligible; - Motor vehicles, gasoline, LPG and diesel, guns, ammunition, cigarettes, and alcoholic beverages are NOT eligible;
- The supply of accommodation is NOT eligible;
Businesses are asked to note the following administrative arrangements:
a. Companies or businesses will file their VAT Return as usual, but record zero-rated supplies for that day; i.e. the business will enter the items on the VAT Return form as zero-rated sales in line 105. This will allow the Barbados Revenue Authority to track the amount of sales and VAT forgone for that day; ensuring a risk-based approach for auditing purposes.
b. In filing VAT, a company must provide sales data (receipts) specifically for the VAT Holiday; companies will still have to issue a tax invoice to the customer with the VAT recorded at 0 percent.
c. As the supply is zero-rated the recovery of input tax is permitted (the business can recover the VAT initially paid).
Businesses will benefit from greater sales due to the increased purchasing power of consumers on the day and we are confident that it represents a win-win for both parties.
I take this opportunity to wish all Barbadians, a very happy, special and safe Merry Christmas and all the very best in 2023.
Minister in the Ministry of Finance and Economic Affairs, Ryan Straughn