Business
Barbados Government Cancels VAT-Free Holiday Amid Economic Constraints and Social Media Anticipation
The government's decision to cancel the VAT-free holiday in Barbados has disappointed business figures, who expected the initiative to stimulate economic activity during the Christmas season.
By Ryan Gilkes
The government’s announcement that there would be no VAT-free holiday this year has not come as a surprise for some of the island’s leading business figures.
Just after midday on Tuesday, the Barbados Government Information Service gave notice that the day, highly anticipated by consumers, was a no-go.
“Due to numerous social media campaigns and other media commentary which have contributed to heightened expectations of a VAT-free Holiday, potentially leading to a slowdown in actual economic activity, the Ministry of Finance advises the public and the business community to conduct their business with no such expectation,” the statement said.
Chairman of the Barbados Private Sector Association (BPSA), Trisha Tannis told Barbados TODAY the decision was not unexpected, considering economic constraints. But she suggested that the timing, only days before Christmas, countered the original goal of stimulating economic activity, causing an adverse effect.
Tannis said: “You must appreciate the BPSA, as co-chair of the BERT (Barbados Economic Recovery and Transformation Plan) Monitoring Committee, is very well aware that the government certainly could not afford to sustain [it], at least not to our observation with the information that we have available to us. It would not be in a position to sustain this sort of initiative on an annual basis.
“As it relates to the impact on business . . . timing is everything. I think the announcement that it was not going to be continued this year, having come essentially five days before Christmas, has essentially had the opposite effect that the initiative was originally designed to achieve, which was to generate economic activity.”
The BPSA leader pointed to the impact of widespread anticipation fuelled by fake news on social media, stating that earlier notice could have prevented negative repercussions on the retail and distribution sectors.
“Whilst we appreciate the rationale or the suspected rationale behind this lack of a VAT-free day, we did not anticipate it. We would have preferred that such notice [could] have been given a few days earlier . . . so that the country would have known not to anticipate and it would not have negatively affected the retail and distribution sector,” Tannis said.
For Eddy Abed, managing director of Abed’s, the absence of a VAT holiday is a major disappointment. He cited the previous successes of the initiative in attracting consumers and boosting sales.
He told Barbados TODAY: “Many of our customers were waiting for this event, and now that it’s not coming, it’s going to impact us, it’s going to hurt us. We’re collectively, as a business community, trying to come up with other options, other types of means that we can motivate our customers to come out.
