Barbadians Urged To Choose Tax Refund Certificates Over Bank Deposits

by Amanda Banks, Tax-News.com, London

24 November 2004

With interest rates at an historic low, tax refund certificates offer a much more attractive rate of return than bank deposits, according to a leading Barbadian tax expert.

According to a Barbados Nation News report, in a speech delivered to an investors' forum organized by the Barbados Stock Exchange, Charles Tibbits, tax partner at PricewaterhouseCoopers, explained that the interest rate on tax refund certificates was currently 4.5%, comparing favourably to the 2% offered by commercial banks on deposits.

According to the national news service, Tibbits also spoke on the issue of tax and pension planning, telling the audience that current legislation does not allow for the mobility of pensions, meaning that vested employees cannot transfer funds to another scheme if they move employers.

However, Tibbits explained: “When there is a situation where you are not vested, you are permitted to get a return of your contributions less the applicable tax.”

He added: “You could minimise that tax cost provided that you invest it in relevant Government securities within four months of when you receive the lump sum or return of contributions and you must keep that for five years.”

Tibbits noted that individuals and companies can also take advantage of other pieces of legislation in an attempt to save on tax, including the Small Business Development Act and the Tourism Development Act.

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