Anticipation Fizzles: Retailers Brace for Christmas Season Amid Uncertainty Over Potential 'No VAT Day' Announcement

As the festive shopping season picks up, anticipation for a potential ‘No VAT Day’ has turned into a lingering disappointment, with retailers preparing for a Christmas without the tax break that delighted shoppers on previous occasions.

While businesses adapt their strategies in light of last year’s missed opportunity, the government remains silent on whether this year’s shopping extravaganza will see a VAT-free surprise.

Eddy Abed, Chairman of the Bridgetown Revitalisation Committee of the Barbados Chamber of Commerce and Industry, reflected on the impact of last year’s unmet expectations. In 2021 and 2022, shoppers benefited from a boost to their spending power as the government declared a VAT-free day. The 17.5 per cent Value-added Tax (VAT) on goods was zero-rated four days before Christmas, but there is no such expectation this year, and this did not happen last year.

Abed said: “We’ve planned our advertising around the lack of having a VAT-free day. Last year we were badly disappointed because many of us waited and geared up towards that, and it never came. We’re not going to get caught again with the same idea.”

He added that it would be surprising if the initiative were announced this year, ” it’s important for us to try to maximise what we can between now and the end of the year. The advertising team has done just that, and there’s nowhere in any of our plans that we anticipate a VAT-free day”.

James Clarke, president of the Barbados Chamber of Commerce and Industry (BCCI), highlighted the challenges that could be associated with implementing a No VAT Day.

He said: “If the government chooses to offer it, the businesses request that you give adequate notice so that it can change your point of sale systems.

“The main thing that businesses ask for is that we give adequate notice so that they can make the preparations. So it doesn’t turn into confusion on that day.”

Clarke said he has not heard any indications from the government about whether the initiative will happen this year.

“At this stage, it seems a bit late, but you never know,” he said.

For consumers, the prospect of a No-VAT Day is welcomed as an opportunity to save on purchases, especially during the high-spending Christmas season.

One city shopper commented: “It would be good for most people shopping for Christmas because you’ll pay less money. But it’s up to the government to decide if they can offer it.”