Monday, April 22, 2024

Revised vat free basket of goods from September 1


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THE MINISTRY OF Finance and Economic Affairs has moved ahead with Government’s policy as announced in the June 2015  Financial Statement and Budgetary Proposals for a revised list of basic food items to reflect a more affordable, healthy and better targeted VAT free Basket of Goods.

This disclosure has come from Minister of Finance, Christopher Sinckler, who said the new basket of basic food items which would be exempted from the standard VAT rate of 17.5 per cent will be available to all consumers from Tuesday, September 1.

Sinckler stressed that the VAT free basket has been carefully selected by an Inter-Ministerial Committee following intense discussions over a nine-month period.

“Government has ensured that foods of high nutritional value which reflect the needs of the average Barbadian have remained in this basket. For every item that has been taken out, a nutritious equivalent substitute remains in the basket. This was an important recommendation of the Committee as it strongly believed that the changes should not negatively impact the health of Barbadians,” Minister Sinckler underscored.

He explained that from the inception of VAT in 1997, a basket of basic food items was included to give relief, especially to the poor and vulnerable, who were likely to be more negatively impacted by the tax.

He pointed out that when a qualitative and quantitative in-depth analysis of the various tariffs was conducted by officials of the Inter-Ministerial Committee from Finance and Economic Affairs, the Barbados Revenue Authority, Commerce, Agriculture, Health and Social Care, it was discovered that some of those items could not be legitimately classified as basic.

Click here to download a list of the Revised Basket.

Click here to download a list of items Removed from Basket.

He said: “We ended up with a basket of goods with a lot more sophisticated things than would have been described as basic. In other words, we ended up with over 400 items and that was because of a particular challenge that occurred in relation to the disaggregation of the tariff headings, which apparently did not take place. Whole tariff headings were copied into the basket and therefore items that were not originally intended to be in the basket got in there.”

The Minister of Finance stated that as a result, a substantial amount of revenue was lost, and Government had to rectify the situation. He noted that the change would result in a net gain of over $20 million to the Treasury in a full financial year.

Examples of some items included in the amended VAT free basket of goods are cane sugar, wheat or mueslin flour, brown and white rice, fresh fruit, dried legumes, pasta, chow mein, fresh or dried citrus fruit, vegetables, potatoes, chicken and various types of fish. (BGIS)


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