The Mottley administration has announced that Barbadians will have a tax free shopping day on Monday.
The announcement was made on Saturday by Finance Minister Ryan Straughn who said that consumers will be exempt from paying the legislated 17.5 per cent value-added tax (VAT) on goods and higher purchase sales.
He said the initiative will make it easier for shoppers who have been financially challenged over the past few years and allow them to stretch their budgets.
The goods that are eligible for the VAT are those that are available for sale with immediate issuance or delivery to the consumer on the day as well as higher purchase sales.
Among those that do not qualify are goods that are not in stock; credit purchases or goods on consignment; motor vehicles, guns, ammunition, cigarettes and alcoholic beverages; and the supply of accommodation.
The minister advised that companies or businesses are expected to file their VAT returns as usual but instead record zero-rated supplies for that day.
Straughn said this would allow the Barbados Revenue Authority (BRA) to track the number of sales and VAT forgone for that day, ensuring a risk-based approach for auditing purposes.
“In filing the VAT, a company must provide sales data or receipt specifically for the VAT holiday. Companies will have to issue a tax invoice to the customer with the value-added tax recorded at zero per cent. As the supply is zero-rated, the recovery of input tax is permitted as the business would be allowed to recover the VAT initially paid on the items.”
Straughn maintained that the VAT holiday will represent what he considers to be a “win-win” situation for both the consumers and businesses.