In an attempt to reduce its fiscal deficit, Barbados Finance Minister Christpher Sinckler has announced a rise in value-added tax VAT.
Presenting the government’s 2010 budget, Sinckler said that deficit for 2009/2010 was estimated at BBD712.9m (USD356m), or 8% of GDP. This compared to BBD396.9m, or 4.8% for 2008/2009.
“This fiscal outturn reflected a marked slowdown in revenue intake on account of the weakened domestic economy, increased government expenditure that supported certain key sectors such as tourism, and support mechanisms for job retention within the Barbados economy,” the Finance Minister explained.
Sinckler said that the VAT increase of 2.5% to 17.5% would take effect from December 1, 2010, but added that he saw it as a temporary measure for the next eighteen months. He said that he would “review this at the end of one year with a view to providing relief subject to progress in reducing the fiscal deficit. This measure is expected to raise an additional BBD124m.”
.Tags: tax | budget | tax rates | value added tax (VAT) | Barbados | VAT
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