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Barbados Shrinks VAT-Free Basket of Goods, September 2015


 Still VAT-free in Barbados.

Barbados has a basket of goods that are exempt from the standard 17.5% VAT rate. On September 1, 2015, the contents of that basket shrank. Minister of Finance Chris Sinckler expects this will create an additional $20 million in revenue per fiscal year.

Previously, more than 400 goods were VAT-free. As of September 1, that number is reduced to under 200, most of them nutritious foods. According to the Barbados Government Information Service, the new policy creates “a more affordable, healthy and better targeted VAT free Basket of Goods.”

The basket of exempt foods was created along with the VAT in 1997, to help keep basic food affordable for the “poor and vulnerable.” Yet recent analysis of the contents of that basket has revealed that “some of those items could not be legitimately classified as basic.” Minister Sinckler stresses that the products remaining in the tax-exempt basket are good:

“Government has ensured that foods of high nutritional value which reflect the needs of the average Barbadian have remained in this basket. For every item that has been taken out, a nutritious equivalent substitute remains in the basket. This was an important recommendation of the Committee as it strongly believed that the changes should not negatively impact the health of Barbadians.”

The following items remain in the basket, VAT-free:

  • Brown and white rice
  • Cane sugar
  • Chicken
  • Fresh fruit
  • Fresh vegetables
  • Various types of fish
  • Wheat and mueslin flour

Soda, on the other hand, is now subject to tax.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.