Barbados’ Minister of Finance, the Rt. Hon. Christopher Sinckler, presented the 2017 Budgetary proposals on Tuesday 30 May 2017. The proposals were centered around objectives of:
- Reducing the fiscal deficit; and
- Protecting and increasing the country’s foreign exchange reserve levels.
Among many other things, the Minister considered recommendations made by private sector entities in Barbados. The recommendations were inter alia aimed at reducing the Government’s level of expenses and increasing the country’s commitment to business facilitation in order to increase investor confidence. However, Minister Sinckler emphasized that some of those recommendations could cause an impact on the country that it could not now bear.
The main immediate proposals highlighted by the Minister in order to achieve the Government’s objectives were:
The National Social Responsibility Levy.
This levy was introduced in the 2016 Budgetary proposals and has been in effect from September 2016 at a rate of 2%. it is applicable to all goods imported into Barbados as well as all domestically manufactured goods.
Pursuant to the 2017 Budgetary proposals, the rate is to be increased from 2% to 10%. This increased rate is due to take effect from 1 July 2017.
Foreign Exchange Commission
Effective 1 July 2017, a 2% commission is to be imposed on all sales of foreign exchange by authorized dealers (commercial banks and other approved financial institutions). It will apply to transactions such as wire transfers, credit card transactions, and over the counter sales, among other things.
Excise Tax
Also effective from 1 July 2017, the excise tax on fuels is proposed to be increased as follows:
- Gasoline – from BBD$0.74 to BBD$0.99 per litre (an increase of BBD$0.25 per litre)
- Diesel – from BBD$0.20 to BBD$0.44 per litre (an increase of BBD$0.24 per litre)
Tax Amnesty
A tax amnesty will begin on 1 June 2017 and will end on 30 November 2017. Under this amnesty, all penalties and interest in respect of outstanding Value Added Tax and Land Tax will be waived.
The Minister indicated that the revenue generated from these and a few other measures would serve to mitigate the projected 2017/2018 fiscal deficit and provide a surplus of approximately BBD$29 million.