Barbados extends 17.5% VAT
(Barbados Nation) Minister of Finance Chris Sinckler showed yesterday that not only had the Value Added Tax (VAT) outperformed all projections but that the country’s high fiscal deficit of nearly nine per cent of Gross Domestic Product in 2010 had been dramatically lowered to 4.5 per cent.
Introducing the Value Added Tax (Amendment) Bill to Parliament today – which will extend the original 18-month increase in VAT from 15 to 17.5 per cent – Sinckler said VAT had outperformed projections every month, with the last quarter raising B$184 million in revenue over the previous financial year and raising B$1.3 billion over the last 18 months.
“We said the VAT was one of the most effective and efficient ways for us to help raise revenue, to bring our revenue levels up to around 29 per cent of GDP … and now the results have borne us out that our policy was the correct policy. We predicted we would bring in anywhere between B$800 million and B$900 million in VAT as a result of those measures. Over the 18 months we’ve bettered that, and we’ve brought to book, based on the estimates of the Accountant General, B$1.3 billion in VAT,” Sinckler said to sustained applause.
Noting that VAT was a transactional tax, he said its revenue was consistent with the progress of the Barbados economy from recessionary trends onto a growth path.