BRIDGETOWN, Barbados, Jun 27, CMC – The Barbados government has maintained the 17.5 per cent Value Added Tax (VAT) but has announced some partial tax relief for citizens as Finance Minister Chris Sinckler outlined the government’s fiscal policy for the next 12 months on Tuesday night.
In a presentation lasting just over four hours, Sinckler also announced a 50 per cent excise tax on gasoline and diesel, a partial restoration of allowances to workers, insisting that the budget was aimed at restoring, repairing and rebuilding an ailing economy.
There had been widespread anticipation here that the Fruendel Stuart administration would have reversed a series of tax measures implemented in the last budget including the increase in VAT from 15 per cent, but Sinckler strongly defended the government’s fiscal strategy during his presentation.
He told Barbadians that the local economy is not of the woods just yet and prudence dictates that the measures must be moderate and in keeping with the government’s goal to maintain stability.
“It is critical for all Barbadians to appreciate the depth of the economic challenges we face. We have to understand that injudicious decision making on either side of the spectrum will only unravel the gains that we have so far on the road to recovery but also seriously compromise the things which we have come to cherish as Barbadians
“The VAT rate of 17.5 percent will remain in place until further notice. The VAT has proven to be a most effective and efficient instrument in our efforts to increase revenues and help close the fiscal deficit.
“Given the seeming reduction of oil on the world market now put at just over US$80 a barrel and which is beginning to filter through to the domestic price for the refined products we have decided to retain the 50 per cent increase for a little longer to assist in attaining our revenue targets and contribute to our ever expanding alternative energy programme,” he said.
Sinckler however assured that if oil prices surpassed US$95 a barrel in the near future, the government will take action to adjust the rate.
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